7 Trading Rules That Changed My Career Forever
After five years of inconsistent results, mounting losses, and near-burnout, I discovered something that changed everything: Rules aren't restrictions. They're freedom.
Here are the seven rules that transformed my trading from chaotic gambling to systematic profitability.
Rule #1: Never Risk More Than 1% Per Trade
The Problem I Had:
Early in my career, I'd risk 5-10% on "high conviction" trades. One bad week could wipe out a month of gains.
The Math That Changed Everything:
With 10% risk:
- 5 losing trades = -50% account
- Need +100% to recover
With 1% risk:
- 10 losing trades = -10% account
- Need +11% to recover
Real Impact:
Before: Blown account twice in 2 years
After: Survived 15-trade losing streak with capital intact
How to Implement:
Position Size = (Account Size × Risk %) / Stop Loss Distance
Example:
Account: ₹5,00,000
Risk: 1% = ₹5,000
Stop: 50 points away
Position Size = ₹5,000 / 50 = 100 shares
TradeLyser Feature: Set automated alerts when position size exceeds 1% risk.
Rule #2: No Trading After Two Consecutive Losses
The Pattern I Discovered:
My journal revealed: After 2 losses, my win rate dropped from 58% to 31%. Why?
- Revenge trading
- Forcing setups
- Abandoning strategy
- Emotional decisions
The Rule:
After 2 losses in a day:
- Stop trading
- Close platform
- Journal both trades
- Identify what went wrong
- Return tomorrow (only if ready)
Real Results:
Before this rule (6 months):
- Average day after 2 losses: -₹8,500
- Emotional state: Tilted
- Biggest loss day: -₹32,000
After this rule (6 months):
- Stopped 47 potential "day 3" trades
- Estimated losses avoided: ₹2,18,000
- Mental health: Dramatically better
How to Enforce:
Set a daily loss limit in TradeLyser that automatically alerts you. Better yet, use broker position limits.
Rule #3: Trade Only Your A+ Setups
The Painful Realization:
I tracked 300 trades and discovered:
- A+ setups (my best pattern): 68% win rate
- A/B setups: 52% win rate
- C setups (boredom trades): 29% win rate
The Rule:
Only trade when:
- My primary pattern appears
- Market context is favorable
- Risk:reward is minimum 1:2
- I can articulate the thesis in one sentence
Example:
A+ Setup (I take this): "Bullish flag breakout on NIFTY with rising volume, broader market trending up, clean support nearby."
C Setup (I skip this): "Stock is moving... looks interesting... maybe it'll go up?"
Impact:
Before: 23 trades/month, 48% win rate
After: 12 trades/month, 64% win rate
Result: Same profit with half the stress
Remember: Boredom is not a trading setup.
Rule #4: Set Stops Before Entry (No Exceptions)
The Expensive Lesson:
My biggest loss ever: ₹67,000 on a single trade.
Why? No predefined stop loss. I kept moving it: "Just 10 points more..."
The Rule:
Before every trade:
- Determine stop loss (technical level, not arbitrary)
- Calculate position size based on stop
- Enter stop order immediately after entry
- Never, ever move it against you
The Only Exception:
Moving stop loss in your favor (trailing stop) is allowed and encouraged.
Real Example:
Trade: Long RELIANCE @ 2500
Stop: 2470 (previous swing low)
Target: 2600
Risk:Reward: 1:3.3
Even if it feels wrong, even if "it's about to turn," the stop is sacred.
Result:
- Small losses stay small
- No more catastrophic losses
- Sleep peacefully during overnight positions
Rule #5: No Trading in the First 15 Minutes
What I Learned:
The first 15 minutes after market open (9:15-9:30 AM) are chaos:
- Overnight news gets priced in
- Stop hunts are common
- Spreads are wider
- Emotional trading is highest
My Data:
First 15-min trades:
- Win rate: 39%
- Average loss: 50% larger than usual
- Emotions: High
After 9:30 AM:
- Win rate: 58%
- Better setups
- Clearer price action
The Rule:
9:15-9:30 AM: Watch only
- Check overnight news
- Identify key levels
- Watch for direction
- Let the dust settle
9:30 AM onwards: Trade my setups
Exception: Pre-planned gap strategies (tested and documented).
Rule #6: Close All Positions by 3:00 PM (Intraday)
Why This Matters:
For intraday traders, the last 30 minutes (3:00-3:30 PM) are dangerous:
- Liquidity thins
- Volatility spikes
- Unpredictable moves
- Can't react properly
My Experience:
Trades held past 3 PM:
- 34% reversed against me
- Wiped out good days
- Added unnecessary stress
The Rule:
By 3:00 PM:
- All intraday positions closed
- Booked profits or losses
- Day is done
For swing trades:
- Separate account/tracking
- Different risk parameters
- Planned overnight holds only
Result: No more "let me just hold 5 more minutes" disasters.
Rule #7: Journal Before Sleeping (Every Trading Day)
The Most Important Rule:
None of the above rules matter if you don't have a system to:
- Track adherence
- Identify patterns
- Continuously improve
The Evening Ritual:
Every trading day, before sleep:
- Journal all trades (5 minutes)
- Grade my discipline (A-F)
- Note one thing done well
- Note one thing to improve
- Prepare for tomorrow
What to Track:
- Did I follow my rules?
- Which rule did I break (if any)?
- Why did I break it?
- What was the emotional state?
- What's tomorrow's focus?
The Compound Effect:
Day 1: Just recording
Week 1: Noticing patterns
Month 1: Behavior changing
Month 3: Rules become automatic
Month 6: Different trader
Make It Easy:
Use TradeLyser's auto-journaling:
- Trades sync automatically
- Rule adherence is tracked
- Patterns are highlighted
- Reviews take 2 minutes
How I Enforce These Rules
Level 1: Written Document
- Rules printed and displayed
- Read before every session
Level 2: Checklists
- Pre-trade checklist
- Post-trade review
- Daily review
Level 3: Automation
- TradeLyser automated rules
- Broker position limits
- Alert systems
Level 4: Accountability
- Share with trading buddy
- Weekly review sessions
- Monthly progress reports
My Results: Before and After Rules
Before Rules (Year 1-2):
- Trades: 800+
- Win Rate: 46%
- Annual P&L: -₹1.2L, +₹45K
- Emotional state: Roller coaster
- Sleep quality: Poor
After Rules (Year 3):
- Trades: 320 (fewer, better)
- Win Rate: 61%
- Annual P&L: +₹4.8L
- Emotional state: Stable
- Sleep quality: Excellent
The difference? Not skill. Not capital. Discipline.
Create Your Own Sacred Rules
These are MY rules based on MY data. Yours might be different.
How to Find Your Rules:
- Journal 50 trades (minimum)
- Analyze the data:
- When do you perform best/worst?
- What mistakes repeat?
- What patterns emerge?
- Create rules to:
- Capitalize on strengths
- Protect from weaknesses
- Test for 30 days
- Refine and enforce
The Most Common Objections
"Rules kill creativity!"
No. Rules provide structure so creativity can flourish. Jazz musicians master fundamentals before improvising.
"But what if a great setup appears?"
If it violates your rules, it's not a great setup FOR YOU. Your edge is your strategy + discipline, not random opportunities.
"I can't follow rules consistently."
Then you can't trade consistently. It's that simple. Automate what you can, build habits for the rest.
Implementation Plan
Week 1: Choose Your Rules
- Review your trading journal
- Identify your 3-5 most important rules
- Write them down
Week 2: Create Systems
- Set up TradeLyser automated rules
- Create checklists
- Set broker limits
Week 3: Practice
- Paper trade with strict adherence
- Test your systems
- Refine processes
Week 4+: Live Trading
- Trade with real money
- Track adherence
- Adjust as needed
The Hard Truth
You already know what you should do.
Stop when you're down.
Use stops.
Trade your plan.
Manage risk.
Everyone knows. Few do it.
The difference between knowing and doing is discipline.
And discipline is built through:
- Clear rules
- Tracking adherence
- Automated enforcement
- Consistent review
Your Turn
What rules do you need?
Look at your last 20 trades. What would have improved them?
Write down 3 rules today. Start with those.
Don't try to be perfect. Try to be better than yesterday.
Take Action Now
👉 Set Up Automated Rules in TradeLyser
👉 Download: Trading Rules Template
👉 Next: How to Start Your Trading Day Right
What's your #1 trading rule? Share in the comments.