1. No Setup No Trade
It is a primary thing or first step or most important day options trading rule traders have to follow in their trading journey.
It is extremely important day options trading rule because with only proper setup one can be become a profitable trader with out pre defined proper set up, profitability is next to impossible. The meaning of set up is a particular condition or situation created by market.
A predefined setup with a good risk-reward ratio and best win rate is needed for better results in trading. Traders can make their won setups with good chart reading skill easily. But they have to do minimum three months of back testing and three months of front testing compulsory with only one lot. After that if setup shows good results (Win rate more than 60 to 70%, Minimum 6 or 7 trades should be targeted out of 10. ) , they can use this setup on regular basis and increase quantity step by step and they can also make modifications in set up as per market conditions and increase win rate.
This rule also solves trader’s over-trading problem easily. With the help of this rule, traders can develop passion in their trading psychology. Market transfer money from impatient to patient trader. So it is most important for traders to wait for the perfect setup before taking trade.
