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How to Beat the Market Makers at Their Own Game: Uncovering the Mysteries of Day Trading by Fausto Pugliese

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CHAPTER 14 Trading Rules of the Road

Noted business guru Jim Rohn has been quoted as saying, “We must all suffer from one of two pains: the pain of discipline or the pain of regret. The difference is discipline weighs ounces, while regret weighs tons.” I believe this statement directly applies to active trading: you will not succeed as an active trader without a significant amount of discipline.

The system that I've laid out in this book is simple, but it's not easy. If you follow the 10 simple rules that I'm about to outline for you, I genuinely believe that you will succeed. Following these rules isn't easy. In the heat of the moment, it's tempting to deviate from these rules and make up your own. Don't give in to such temptation—I assure you that it will be your downfall. These rules are specifically set up to maximize your gains and minimize your losses. That being said, here are the 10 rules that you must follow in order to be a successful active trader.

Rule #1: No overnights. To be completely honest, this should really be Rules 1 through 50. NO OVERNIGHTS! NO OVERNIGHTS! NO OVERNIGHTS! This rule is so crucial that I originally considered naming this book No Overnights! The reason for this rule is not because we make our trades during daytime hours—just about every investor makes his trades during the day. The reason we are called active traders is because we open and close all of our positions during the same day; we are not overnight traders. We start the day without ...

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