Golden Rules of Trading

Hi Steven,
Well thank you for your time today to discuss your golden rules of trading. First off, for a bit of background, how long have you been trading and what first got you interested?

It all began back in the 1980s when the government was privatising assets and I, like many others, started trading in equities. On the back of that I was attracted by the world of futures trading due to its vibrancy, and the excitement and exhilaration of not knowing what happens in the markets by the minute, hour or day. The feel good factors of the win and being your own boss were big draws too. A trading career has the potential to give you a great work/lifestyle balance. It provides you with choice in life which can be a rare thing!

What other skills do you believe, now looking back, suited a career in trading?

Most importantly, I was very strong mathematically, especially mental arithmetic. Being able to make quick calculations and decisions under pressure is crucial. Also evaluating your risk versus reward quickly is important too. Not skills per se, but I am also a cautious person by nature and almost pessimistic. This was very useful in helping me stay disciplined and focus on the losing trades. The winners will take care of themselves. I am also extremely driven to succeed and set myself huge internal goals. Being slightly materialistic definitely fuelled that drive.
Finally, I had belief in my ability.

So you had the skills and the personality traits but application is key...which brings us nicely to these golden rules. Can you tell us these rules and why you feel they are so important?

  1. It's a marathon not a sprint: This is a job for life, not a week, and it is important to be patient and don't feel you have to make money instantly. It will come.

  2. Don't get married: To be clear, I'm talking about getting married to trades here. You mustn't get emotional about trades. Don't trade your P&L. If you take a hit, don't react aggressively - especially when opportunities aren't there. Vice versa, don't get carried away after a few wins.

  3. First cut is the cheapest: Similar to the last rule, be ready to admit you are wrong and just get out of a position. Holding on always makes things worse.

  4. Stay in your comfort zone: Only trade when you feel comfortable. This applies to trading in the markets you feel strong in but also not pushing non-existent opportunities as that amounts to gambling.

  5. Strive for consistency: Consistency is scalable and that's when you can really start reaping rewards.


What advice would you give to an aspiring trader?

For people thinking about a career in trading, you have to treat it as an education. The 1st year is like an apprenticeship or a Masters degree. You can't be a whizz over night as it is all about experience. You have to go through it all to learn it - with the lows arguably more important than the highs.

You need to enter the world of trading with the right mindset. Rule number 1 - this is a marathon not a sprint.


Why do you think Met Traders is an ideal place for people to come and learn to trade and be successful?

We run a meritocracy here at Met Traders. Once you have gone through our great course, which is free by the way, you will be live and trading and the power to succeed will be in your hands. But you will still be surrounded by good traders to learn from and we have a very engaged management that are there to help you succeed.

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