{"id":7523,"date":"2010-10-05T14:31:38","date_gmt":"2010-10-05T18:31:38","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=7523"},"modified":"2010-10-05T14:31:38","modified_gmt":"2010-10-05T18:31:38","slug":"adams-rules","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/adams-rules","title":{"rendered":"Adam&#8217;s Rules"},"content":{"rendered":"<p>This weekend, I was going through some of my old trading documents and research and I found a set of rules for a swing trading system I traded for many years.\u00a0 I thought I would share a few snippets from those rules, especially the parts dealing with trade management and behavior management.\u00a0 I cleaned them up (made the language&#8230; um&#8230; PG), and removed specific system references&#8230; and I think this list is now relevant for traders daytrading, swingtrading, or even investing.\u00a0 To me, it&#8217;s useful to re-read things like this sometimes, just to remind myself of the obvious.\u00a0 I hope you find them useful.\u00a0 (The last rule alone has saved me <em>a lot<\/em> of money over the years&#8230;)<\/p>\n<p><strong>Trade Management<\/strong><\/p>\n<ul>\n<li>Let winners run.  While momentum is in phase, the market can run much further than might be expected.<\/li>\n<li>Do not exit winners without reason!<\/li>\n<li>Be quick to admit when wrong and get flat.<\/li>\n<li>Sometimes a time stop is the right solution.  If a position is entered, but the anticipated scenario does not develop then get out.<\/li>\n<li>Remember:  if one thing isn\u2019t happening the other thing probably is.  Historically, this has never been good for me&#8230;<\/li>\n<li>Be careful of correlations.  Several positions can often equal one large position bearing unacceptable risk.  Please think.<\/li>\n<\/ul>\n<p><strong>Other thoughts<\/strong><\/p>\n<ul>\n<li>I am responsible for risk management, money management, trade management, doing the analytical work and putting on every trade that comes.<\/li>\n<li>I am not responsible for the outcome of any one trade.  Markets are highly random.  I do not have a crystal ball.  I am not as smart as I think I am.<\/li>\n<li>Risk management is the first and last responsibility.  I can [mess]anything else up and be ok as long as I do not violate my risk management parameters.<\/li>\n<li>Opportunity comes every day.  Do not neglect the work.  Must do analysis every day.<\/li>\n<li>Opportunity comes every day.  Get out of [crappy] positions.  Move on.<\/li>\n<li>I am a better countertrend trader than a trend trader.  Sometimes the crowd is right, and they will run me over at those times if I\u2019m not quick to admit I\u2019m wrong.<\/li>\n<li><em>If you\u2019re going to do something stupid, at least do it on smaller size.<\/em><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Sometimes it is necessary to state the obvious&#8230;<\/p>\n","protected":false},"author":388,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[943,1,456,455],"tags":[1424,1423,1425,1093],"class_list":["post-7523","post","type-post","status-publish","format-standard","hentry","category-adam-grimess-blogs","category-general-comments-2","category-trader_development","category-trading_psychology","tag-behavior","tag-money-management","tag-position-sizing","tag-rules","no-post-thumbnail"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.1.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ 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