Trading System Rules For Torque Day Trading

Write your goals and objectives down on paper.

This might sound a bit silly, but think about it, if your goals are just guidelines in your mind, your mind can change from day-to-day, thus you might lose direction of what you want to achieve or why you started Torque trading system in the first place. Technically you have not created any goals or systems unless you have written it down and can refer back to it.

Measurement is very important.

For a business to be successful, it must have objectives that are measurable and realistic. In trading (obviously) the main objective is to make money, but it is important to have other objectives that are not purely cash-related. We must always remember that risk vs. reward go side-by-side in trading and that we cannot expect to achieve high returns without managing high risk trades properly (i.e. draw-downs).

Trust your system and be disciplined and consistent

If you were standing next to a big gas boiler in a factory and a warning light started flashing saying that the tank needs to be decompressed or it will explode, surely you would heed the warning?, as it warns of possible danger. Well similarly, your trading system should be followed with the same discipline, in order to for you to succeed it is critical that you follow every trading entry, adjust every stop-loss, and close out every trade when your system indicates you should do so. You must have complete confidence in your trading systems

Let your profits run

The key to being a successful Torque trader or any other trader in fact is to "let your profits run". It is four simple words that are actually very hard to stick to. When we're in a profitable trade it is natural human instinct to want to sell and take profit in case the market reverses. It is this key element that leads to a trader being profitable or not, as your huge profits on trades, that you have let run, far outweigh the many small losing trades and this makes the difference between overall profitability and simply breaking even, or losing due to trading costs (commissions, spread, and slippage).

Cut Your losses short

This is the brother rule to "let your profits run", and is pretty self-explanatory, but also very difficult to implement. Profitability is achieved by making few big winning trades, in the same light, capital preservation comes from avoiding the few large losing trades that the market will throw in our direction once in a while. Setting a loss threshold point before you enter the trade is absolutely critical, so before you enter a trade, know how much you're risking in order to achieve the desired gain in the trade (ie.: risking 2% capital for a trade that possibly return 4%, risk-reward ration of 1:2)

Do Not ever add to a losing trade

Possibly one of the most important rules that can be emphasised - Any trader will tell you, that if you're in a losing trade, (which shouldn't happen if you following the two previous rules), never under any circumstances, add to a losing trade, as humans we do not like to admit we are wrong and admitting we are on the wrong side of a trade is difficult, and adding to the losing trade may seem like a good idea to "average down", but unfortunately if a trade is a loser, the chances of it turning around and becoming a profitable trade are too small to risk more money on. If the trade is in fact going to turn around and go the opposite direction, why not get out of the losing trade and wait till it starts moving in the direction you intended it to and save yourself all the stress and anxiety?

Have proper risk management

One of the biggest mistakes a trader can make is over exposure of their capital on a single trade. There is an old saying in poker - "than going all-in works every time but once", this holds true for trading.

People often ask "what is the best amount to expose on a single trade?" The answer is simple, between 1%-3%, if that is the case if you are completely wiped out in a trade then you only lose 1%-3% of your capital, which is not such a big deal.

Also stay clear from over leverage, most brokers boast about the 200:1 up to 500:1 leverage they offer, but this leads to account destruction.

Have a positive attitude

If you believe you can achieve at trading then you must have faith in yourself and your trading system, there is no room for doubt, because as soon as you doubt yourself you will become undisciplined with the rules, which will lead to unprofitable trading.

Choose a good broker

Spend some time researching the various brokers out there, because if you are trading a lot then your trading costs (commission, spread, and slippage) will cut into your profit.

Don't trade with emotion

If you have sustained a series of losing trades, don't start adapting your system to start taking more riskier trades to "win back" the amount you have previously lost, there will be dry patches just like there are in any business, there are good times and bad times, but the successful trader knows this and sticks to his trading system even when he has a series of bad trades.