{"id":17088,"date":"2025-06-21T21:10:43","date_gmt":"2025-06-21T21:10:43","guid":{"rendered":"https:\/\/finderica.com\/?p=17088"},"modified":"2025-06-21T21:10:43","modified_gmt":"2025-06-21T21:10:43","slug":"the-5-non-negotiables-of-making-winning-trades","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=17088","title":{"rendered":"The 5 \u201cNon-Negotiables\u201d of Making Winning Trades"},"content":{"rendered":"
\n

Editor\u2019s Note:<\/strong> When you hear the word \u201ctrading,\u201d you might think of unwise and undisciplined investments that completely ignore conventional wisdom.<\/p>\n

But as Bryan Bottarelli explains below, that\u2019s not the case at all. Successful traders are guided by many of the same time-tested principles that Chief Income Strategist Marc Lichtenfeld espouses here in Wealthy Retirement<\/em>.<\/p>\n

Whether you\u2019re just getting started or you\u2019ve been in the markets for decades, Bryan\u2019s five tips below can help you become a better investor.<\/p>\n

\u2013 James Ogletree, Managing Editor<\/p>\n

\n

Don\u2019t look now, but the market is clawing its way back to all-time highs.<\/p>\n

And that\u2019s bound to draw a lot of interest from brand new retail traders.<\/p>\n

But here\u2019s the thing \u2013 most trading advice for beginners is backwards. They tell you to \u201cstart small\u201d but never explain how to trade small accounts differently than big ones.<\/p>\n

So I made a list of the same five tips I learned trading in the pit of the Chicago Board Options Exchange \u2013 except tailored for people starting with $1,000, not $500,000.<\/p>\n

1. Trade what you already know.<\/strong><\/p>\n

I tell my softball buddies who are interested in trading to buy a stock like Anheuser-Busch<\/strong> (BUD). That way, when they notice more 21-to-25-year-olds drinking Bud Light Lime, they can learn how to turn those observations into profits.<\/p>\n

Or, for all you ladies out there, imagine if you bought Lululemon<\/strong> (LULU) stock at the same time that you bought your first $100 pair of black yoga pants. Over the last 10 years, the stock has gone from $50 to $250. That\u2019s a strong 400% gain.<\/p>\n

When you\u2019re starting out, invest in what you already know. The last thing you want is to get some money tied up in a complex technology that you know nothing about.<\/p>\n

2. Position size like a seasoned Wall Street pro.<\/strong><\/p>\n

Here\u2019s my general rule for a new small account: Only allocate 5% to 10% of your total account value for each new play.<\/p>\n

No one wants to be that guy standing on the dock, holding a suitcase with a sad face. But at the same time, you also don\u2019t want to be that guy who sits down at the poker table, sees one ace, gets all excited, and shoves all in. That sort of untamed aggression rarely pays off.<\/p>\n

As odd as it may sound, position sizing will actually help you make more money with a much, much higher winning percentage.<\/p>\n

3. Define your risk ahead of time\u2026 then don\u2019t freak out.<\/strong><\/p>\n

Here\u2019s a common mistake I see that scares a lot of people off. They make their first trade, and, inevitably, it goes down. They see their trading account in the red, and they get scared, freak out, sell at a loss, and then never try trading again.<\/p>\n

I know the feeling. It happens to everyone. But if you define your risk ahead of time, you won\u2019t freak out. Say you buy $500 worth of Nike. Right away, you should set your total downside risk at something you\u2019re comfortable with \u2013 say, 20%. If your $500 worth of Nike goes down to $400, you\u2019re out \u2013 no questions asked.<\/p>\n

This tip eliminates making trading decisions based on emotion, which already puts you well ahead of every other new trader.<\/p>\n

4. Never ever (ever, ever, ever) second-guess taking profits.<\/strong><\/p>\n

When it comes to taking profits, you\u2019re always going to find yourself with an angel on one shoulder and a devil on the other shoulder, each talking in your ear. The angel is saying, \u201cDon\u2019t be greedy. Take your profit and be smart.\u201d But the devil is saying, \u201cYou idiot! You\u2019re leaving money on the table. Hold for more!\u201d<\/p>\n

Luckily for you, I have a solution. Whenever you find yourself with this dilemma, sell half. This locks in profits, and it still allows you to be in for any further possible upside. It\u2019s the best of both worlds.<\/p>\n

5. Find a trading community.<\/strong><\/p>\n

This is the very best way to learn how to make money day after day. I can tell you firsthand, for me, nothing was more powerful than a group of people all making money together.<\/p>\n

Let\u2019s face it \u2013 sometimes trading can be a pretty lonely game. If you\u2019re at home trading the markets and you hit a big winner, all you can do is fist-bump yourself and then give air high-fives to your imaginary trading partners. That sucks the joy out of winning. But if you have a community of traders all winning together, it\u2019s one of the most powerful feelings in the world.<\/p>\n

Bottom line:<\/strong> Trading isn\u2019t a sprint and it\u2019s not a marathon either. It\u2019s a game that never ends.<\/p>\n

And these five rules help you stay in that game long enough to get good at it.<\/a><\/p>\n<\/p><\/div>\n