Trading Rules

EdgeTrades System Rules

As an EdgeTrades trader, you should adhere to these system rules: 

  1. Entry trading signals are to be traded at the next day's open. 
  2. Exits can be traded at the close or the next day's open (see Executing Trades).
  3. Stops can be triggered at any time.
  4. Do not use leverage. (See Section on Position Sizing).
  5. If you are already in the trade and you see a buy signal for that stock, then continue to hold that stock.
  6. Use a 7%-10% stop loss order from YOUR entry price.  Each trader will have slightly different entry and exit prices due to the nature of the market and exact timing etc.
  7. Try to avoid holding the trade through earnings.  Sometimes it works for you and sometimes against you.
  8. Mentally prepare yourself that you might lose the full amount of the stop loss EACH time you put on a trade.   Although there is small chance, it is still a possibility.
  9. If your position goes in your favor by at least 1%, put in a break even stop.
  10. If you have been stopped out then ignore any re-entry trade (continuing buy signal) that may be signaled. 
  11. Initially allocate only a portion of your investment capital to the EdgeTrades System.
  12. Use only 1/2 of your EdgeTrades capital on each stock's position size (Fixed Fractional Position Sizing).
  13. Hold a maximum of 2 EdgeTrades positions at a time.
  14. Divide your position size by the current price to get the number of shares. For example, if you want to buy $20,000 of a stock trading at $12.53 your would buy 1596 shares.
  15. Keep a running balance of your EdgeTrades balance based on gains and losses from EdgeTrades (You can get a free spreadsheet for this here:  ).
  16. Using fixed fractional position sizing, as your EdgeTrades balance rises you will buy more stock and as your EdgeTrades balances declines you will buy less stock.

Do you think that casino card dealers have to follow certain rules?  Absolutely.  A blackjack dealer must abide by the strict rules placed upon him/her in order to achieve the returns desired by the casino.

Likewise, you as a trader need to adhere to certain rules to achieve the benefits of the system.