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1. Top 50 Day Trading Do’s and Don’ts
Day Trading Do’s and Don’ts - stock trading
system
Day trading profitably over a series of years is
probably the most difficult vocation anyone can
attempt. The odds of being a consistently
profitable day trader are enormously against
the average person. The main reason for the
difficulty in achieving consistent profitability is
the work and discipline involved in the effort of
day trading, along with a dollop of luck along
the way. Even so, given all that, an outlier event
can ruin the day trader if he/she is not on the
job the moment the outlier is made known to
the market! All good day traders are
disciplined, intelligent, and emotionally mature
individuals. They are excellent risk managers.
They manage time well too. The following list

2. has been compiled over a period of 35 years
spent observing the stock and options markets,
as well as trading them. This list is dynamic, as I
add to it when the addition has passed the test
of time and is known by me to be efficacious.
1)If immediately after a trade execution the
trade works dramatically in your favor, you
actually waited too long to execute it.
2)You will know almost always in the moment
right after you initiate a trade whether or not it
will be profitable.
3)If you “know” something, odds greatly favor
that thousands of others also “know” it.
Day Trading Do’s and Don’ts - stock trading
system

3. 4)If at first you are a successful trader with
never having initial setbacks, the odds greatly
favor that you will suffer more so than the
normal trader who has not been so fortunate.
You could even “blow out” your account if not
careful with your newfound success.
5)Breakouts take their sweet time becoming
cyclical.
6)Cyclical periods for stocks far outlast
breakout periods for them.
7) If it seems too good to be true, it isn't.
8)Always position trade options “delta neutral”.
9)100% invested is akin to the “I’m all in”
mentality, which eventually leads to “I’m all
out” of money. Thus, keep some cash available
at all times.

4. 10)Call options inordinate volume of at least an
increase of a few hundred percent of normal
daily activity over a few consecutive days is a
signal of a possible takeover in play.
11)Takeover activity in call options involves far
more
volume for out of the money calls than in the
money or at the money calls. Leverage and
greed are the causes.
12)Large put activity can be bullish IF you know
that the put buyers are also buying the
underlying stock! Thus the puts were merely a
hedge to a long stock position play. This
combination is a synthetic call (i.e., long stock
and long the stock's puts.).
13)Improvement in earnings in one quarter
leads to the same for the next quarter. The
odds of such are quite high.

5. 14)The market will always need touts. Touts
lead the sheep to slaughter.
15)If a popular tout tells you something, that
news is entrenched in the market.
16)The more popular the tout or guru, the less
probability of their recommended play turning
out profitable for you.
17)Professional traders have very small egos.
Touts and gurus do not.
18)Rumors have some fact in them, the
question being how much fact.
19)If rumors are driving a stock up or down,
and in spite of the rumor's denial by those who
should know if those rumors are true or not,
And the stock continues to react to the rumors,
go in the direction of the rumors!

6. 20)Denial is the first step on the road to panic.
21)Always trade hedged. Do not let “one
grenade” blow up your account by shooting for
the moon with that play!
22)Getting caught being short a stock rumored
and acting like a takeover will teach you a
valuable lesson and might wipe you out!
23)Do not give unsolicited advice to any other
trader.
24)Do not make known to other traders your
positions and biases unless they sincerely need
to know.
25) Abnormal pops or flops in a stock without a
reaction by their options to that unusual,
sudden move, suggest those moves will be
ephemeral.

7. 26)Fade the ephemeral moves of #25 (buy that
dip or short that pop!).
27)Do not sell calls to get short or sell puts to
get long. Buy calls to get long and buy puts to
get short.
28)A buy/write is 99.999% equivalent to the
sale of a shorted put, all things being equal
(strike and expiration month the same.). For
proof do the math.
29)Periods of “rotation” tend to end when
seasonal add periods (new money coming into
the market) begin.
30)Things change.
31)Things stay the same.
32)Know the differences between #30 and #31.

8. 33)Be proactive but control losses by always
having a “cut bait” dollar amount for every
trade.
34 Position trade in 3’s by dividing your money
going into the trade
by 3, entering each third of the allotted funds
as the stock fluctuates.
35)Never trade relatives’ money or a friend's
money.
36)Read stock market history books. Not THAT
much has changed!
37)When the dust settles, the fundamentals
rule the day. Charts can only take you for a ride
to that “day's” end.

9. 38)All bull runs end in euphoria and bear runs
end in despair—and not a moment before!
39)There are no rich “cabdrivers”, unless they
inherit it. Fade “their” advice, especially if it
comes to you unsolicited.
40)Even a mushroom cloud begins as a puff of
smoke. Be wary of quiet selling.
41)In a stiff breeze even a turkey can fly. Thus,
do not short a stock just because it is “flying”.
42)Odds greatly favor that a stock that breaks
down below 4 will trade at 2 before it trades at
6.
43)Odds greatly favor a stock that trades up
through 2 will eventually trade at 4.
44)You have NOT seen it all! I once watched in
awe as a 2 dollar stock blasted off to $28 in a

10. month (in 1975), doing so while at the very
same time the company was filing for
bankruptcy! The cause for this weirdness was
that over 110% of the floating stock somehow
was sold short! Once word got out about the
plight of the shorts, all hell broke loose and
buyers raised their offering prices really high! A
few weeks later, after that all time short
squeeze, the stock went to zero.
45)Making money in the stock market is akin to
war. Trading is your tactical movements while
proper money management is your overall
strategy. No war or battle ever went according
to plan. Always be prepared to adjust to the
unexpected as well as the certain collateral
damage.
46)Never stay in a trade where you are “riding
the tiger” (which implies that should you get off
that tiger, the tiger will eat you!). Thus do not

11. add good money to a position which was NOT
planned to be used in the trade.
47)All stock market cycles end in high emotion.
To measure that emotion, use the Standard and
Poor’s short term oscillator. A minus 4 or higher
is reading an oversold condition and a positive
4 or higher is reading an overbought condition.
The stock market always, eventually, reverts to
the mean, or fulcrum.
48)The stock market rises akin to walking up a
flight of stairs, and falls akin to slipping on a
banana peel on those same stairs.
49)The stock market tends to move in a series
of 3's.
50)When the dust settles, the fundamentals
rule.

12. Learn more about this author, Skip Raschke.
Day Trading Do’s and Don’ts - stock trading
system