Chapter 5
Rules for Attacking the Trend
You have to learn the rules of the game. And then you have to play better than anyone else.
—Albert Einstein
Having a game plan implies that a game or sport is being played. Well, trading is not a sport per se, but it does have characteristics of one. Sports have winners and losers. Trading has winners and losers. Sports have a game plan. Trading has a game plan. The participants in sports have differing abilities. Traders have differing abilities. In the same way that athletes can improve their skill through things like practice, traders can improve their trading results through practice. And just like in sports, there are rules that need to be followed in trading.
I have five rules that traders should follow. They are common sense rules, but then again, rules are meant to instill some common sense to games they govern. The difference with the rules in trading currencies and rules in a game is most rules in a game are meant to prevent an unfair advantage to the rule-breaking player or team. In trading, the rules are meant to protect the trader from an unfair disadvantage. Traders who break rules only hurt themselves.
Together with the game plan and mission statements presented earlier, these five rules will increase the retail currency trader's success at attacking the trends.
RULE 1: KEEP IT SIMPLE (BUT STAY POSITIVE)
Most people know, or think they know, the K.I.S.S. principle. In fact, I will often poll the audiences at seminars and ...
