Read Time: 3 Minutes

Over the past few weeks, I've been having a tough time reading $SPY price action. As a result, my win percentage and trading confidence have been approaching all-time lows. 

I need to get things back on track so I'll be making some temporary changes to the newsletter format. 

Instead of spending 2-3 hours compiling my stats and recapping my trading week for the newsletter, I'm going to use that time to study past $SPY charts. My goal is to get a better feel for the ebbs and flows of the market while also identifying a few new setups that I can trade with confidence.

As I'm studying the charts, I'll do my best to jot down my biggest takeaways so that I can share them here in the newsletter. 

Since I'm just starting my price action deep-dive, I don't have any price action tips to share quite yet. So instead, I thought I'd share my current trading rules with you. These are my non-negotiable trading rules, which means I do not break these rules under any circumstances.

Eric's Trading Rules:

1. Must complete entire pre-market routine before entering any trades.
2. No removing stop losses. EVER. 
3. When moving a stop loss to give a trade more room, I must exit part of my position (even if it's at a loss) in order to maintain proper risk. 
4. No getting greedy and moving profit targets as price approaches.
5. Risk $36 - $72 per trade
6. Maximum of 5 trades per day
7. Maximum of 3 losing trades per day
8. Maximum of 1 losing trade per day after 11:45 AM EST
9. Maximum of 3 trades on the day after a $250+ day or on the Monday after a 10%+ week.
10. After getting stopped out on a trade I must step away from my computer and take a 10-minute break from trading. During that time, I can do light exercise, go outside, or meditate. Then, I have to read my trading rules, reminders & goals before returning to my desk. 
11. I do not break my rules under any circumstances. The rules are in place to control my emotions. 
    

There you have it. I hope seeing my trading rules is helpful, but remember, we all have different personalities and tendencies so we all need our own unique set of rules.

I'd recommend that you take my rules and modify them as you see fit. The only rule that you can (and should) copy is rule #11. 

I've found that our trading rules only work if we adopt a zero-tolerance policy for rule breaks. A single rule break (or even a tiny bit of flexibility with a rule) often leads to a string of rule breaks that can devastate a trading account. I don't care if somebody offered me a million dollars to break a rule. I'm still not doing it.

I'd highly recommend that you adopt a similar mindset.

That's it for this week's newsletter. Short and sweet. As always, thanks for being here and we'll see ya next week!

- Eric