Day Trading Rules And Risk Management

Our series on Day Trading Rules will end with this final installment on Risk Management. Let us first turn to Webster for a clear textbook definition. I knew risk management was a serious topic, but perhaps I wasn't aware, just how serious. Feel free to try this experiment at home.

Issue Google the following command > webster define risk management (press enter)

Using the above syntax, you are instructing Webster (the dictionary) to send you its definition of risk management. Who knew Webster had a sense of humor? Look at search result #3. Now that we are in a sober frame of mind, let's dig deeper...

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Day Trading Rules Part 2

In Part 1 of Day Trading Rules we covered the legal and practical sides of Day Trading. In Part 2 we want to move in and take a closer look at specific Day Trading Rules that will affect exactly how we operate our Day Trading business using rule based trading. Topics we will cover include, but are not limited to -

how much capital we risk on each individual trade as well as establishing parameters for both our entries and exits.

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Important Day Trading Rules | Stocks - Futures - Options

Are you an Active Day Trader? If so, there are 2 sets of day trading rules you must be aware of. One set of rules are issued by regulatory agencies such as the SEC / FINRA / NFTA / IRS. The second set of rules are ones you establish as the foundation of your day trading business. The first set are actual laws you as a Day Trader must abide by to avoid fines, penalties or criminal charges.

Most traders find it easier to follow rules dictated by others, even when they seem arbitrary or unfair. It's not simply the fear of prosecution, it's a conditioned response we carry with us from birth. From an early age we are told what to do and when to do it. As we grow older we begin to yearn for independence, fueled by a desire to make our own decisions. Let's address the "easy" list first.

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