So I realize this is something I should have done long ago, but better late than never. These rules have been in my head, but writing them down is obviously a good idea. So without further adieu, here is my trading plan/rules.
1. Only trade stocks that are over $10.
2. Do not trade stocks with less than 1M volume.
3. Never enter a trade unless sound technical analysis has been performed and the trade is confirmed. I.e. Do not trade on a whim or on emotions!
4. Do not chase trades I.e. if we are getting close to a support level and my entry was short, don’t take a trade to eek out the last few cents.
5. Always buy contracts at least 2 months in advance.
6. Never have open positions without a solid, pre-determined stop.
7. Move the stop up to lock in gains over 20% if the target has not yet been reached.
8. If the target is breached, do not necessarily close the position. Move the stop to the target and let the gains run.
9. NEVER move a stop to stay in a losing trade.
10. Always have at least a 2:1 risk/reward ratio.
11. Do not dwell on losses in a negative way. Study then, know what you did wrong, learn from them and do better next time.
This is it for now. In addition to updating this as I learn and experience more, I am planning on making a post that describes the steps I follow to analyze and decide on a trade.