Page 2 - Trading #101 Course – PART II TWO: SUCCESSFUL TRADING PIE – www.traderscoach.com

TRADING #101 COURSE – PART II TWO: SUCCESSFUL TRADING PIE – WWW.TRADERSCOACH.COM

Chapter 9:

First Slice - Trading and Investing Rules

The first slice of the “financial pie” is to develop your trading and investing rules. This is
not a solely independent part of trading success since it is completely dependent on
your ability to master the other three slices of the pie, which are scanning for market
opportunities, money management, and financial psychology.
All four of these pieces of the pie are equally essential in attaining trading success and
profitability.

This chapter, The First Slice: Trading and Investing Rules, is designed to show you how
to survive the development phase of building a system that is consistently profitable.
Generally, most new traders skip this part of the process. This chapter is not intended to
give you the tools to create your profitable trading rules, since that is a vast and varied
topic that is beyond the scope of this book. You will need instead, to investigate this
topic yourself, and there are many valid sources to go to for this, many of which are
listed at the back of this book in the Chapter titled Suggested Reading and Education.

You’ve probably heard the staggering statistic that 90 percent of all traders lose money
in the markets, and only 5 percent are consistently profitable. The reason these
statistics are so dramatic, is because traders and investors enter the markets with real
money and live trading accounts before they have developed profitable trading rules.

Human nature typically is one such that we want instant and easy results. Most
individuals are impatient and do not have the focus and determination to develop a
successful system before trading with real money. They are like moths to the flame;
they can’t resist and just must get in the market with real money. And, 90 percent of
them get burned by the flame. You will need to resist this temptation if you want to
survive.

Develop and Test Your System for Profitability

Developing a profitable trading and investing system will require that you do your
homework. If you already have a profitable system in place, then you are in terrific
shape and can skip this chapter.

But, if you are just starting out and have not yet developed a system, you will need to
wholeheartedly dedicate yourself to this task. Many new traders have the illusion that

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