Rule 1:

You should always understand that PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. In other words, The graal doesn’t exist. Markets are mostly driven by human actions (and robots). Investors are changing and evolving in every market cycle. Backtests are important but the next rules are even more important.

Rule 2:

Trading is a marathon, not a sprint race. Trading is two steps ahead, one step back. If you understand that sentence then you are ready to trade. Otherwise learn and train with virtual money.

Rule 3:

Risk management is the key to succeed on a long term run. Trading is mostly probabilities. Nobody knows where the market is going up or down. The only thing you can be sure is the risk you take, NOT where the market is going. The key is to work on it. Ten losing trades in a row by risking 10% on each will empty your account.

Be careful, trading/investing is not a game and is very risky. If some trader earn money some have to lose in the other hand. Most of the time your broker will be the one who earn the most. Learn and train, easy money doesn’t exist.

Cheers,

The TradingLabo Team