The Trader Code: Personal and Professional Ethics in Trading

[macso9413]

All professions have - or should have - a code of conduct that their members follow. Trading is not different. Over the years, I have developed my own Trader Code to guide my activities as operator and manager of funds, and I try to fulfill it as best I can. Here I share it: I will not operate if I am hungry, tired, emotionally disturbed or sick. I will never operate without a well-defined trading plan, with clear criteria of entry, exit and risk management, and I will try to follow it to the maximum. I will only use strategies and methods that I have personally tested and validated. I will not seek to improve my understanding of the market, my trading system and the skills necessary to take advantage of the movements. My decisions will only be based on my observations and analysis, not on the opinions of others. I will maintain an objective view of the market, without letting you take advantage of my open positions. I will analyze the market with flexible attitude, willing to change my view of new information. I will only open an operation if I have a reasonable certainty that the result will be favorable. If the market offers an opportunity that fits into my strategy, I will not hesitate to use it. I will not the market with it.

[anahemhem]

I will not operate if I am hungry, tired, emotionally altered or ill. There are scientific studies that support that point. Apparently, when blood glucose levels fall, it also lowers our willpower. The interesting thing is that by normalizing those levels, the force returns. It has also been proven that if we use our willpower constantly, it runs out. That is, after resisting various temptations, it is easier to give in. Hence the importance of not being attached to the graph and taking breaks when we avoid entries by following the plan. And above all, not deciding anything when we are tired.

[pemiune12]

Very good fact, thank you. I start right now with Thinking fast, thinking slowly. Learning must a trader, unlearn and relearn as well.

[Oxm1i.]

If you want to know more about willpower, take a look at this. Invulnerability is in defense; victory, in attack.

[Oxmayvalges6]

I thought the points from 16 to 20 were very powerful. I had never seen anything like this in a trading code. Invulnerability is in the defense; victory, in the attack.

[macso9413]

Thank you. In fact, this is a code that applies to my personal operation, not my trading plan (which is covered in points 2 and 3).

[angela101098]

After reading the first chapters of Quick Thinking, slow thinking, I would add something that is not a rule of trading per se, but that is fundamental: having a good diet to perform well. The book mentions a study with judges in Israel who evaluated parole applications. The farther they were from the last meal or closer to the next one, the less indulgent they were. Before lunch, the probability of granting freedom was 0%. Conclusion: eat well, do it regularly and always have something to bite while you operate.

[anelina997]

Building good relationships is also part of trading.

[macso9413]

Thank you. I have found that every time I have broken one or more points of this code, I have lost money. Especially points 6, 7, 8, 10, 11, 12 and 14 have passed me bill more than once. I am still not perfect fulfilling it, but I am in the process. I recommend that all traders develop their own code. It does not need to be this, but it does be based on their real experience. Many already have mental rules, but putting them in writing and reviewing them often makes the difference. And if more traders applied points like 16 and 17, the forums would be much healthier spaces. I am sure that we have already lost great operators in these communities because we do not want to defend ourselves from absurd attacks.

[Pelamginov]

I wonder, as fund manager, are these points part of your contracts with customers? Do you have any insurance to cover the total or partial losses of funds under your management? GS>