Dharamik Rule Book

Trading is very similar to Army Practice

Sound strange?
No doubt about it, so let’s discuss some point which proves how both are related
we call it as “Trader’s army rule book”

1. Control On Emotions:
You have to Train Your Mind like Army’s Training.
Leave all the emotion and become a Robot
Always remember “Learning to trade is not the toughest task, controlling your emotions is” …Dharamik

2. Trade Like A Sniper:

When in Doubt Get Out. Full time Trading doesn’t mean you have to Trade whole day. You don’t have to catch
all the opportunities Available in the market. Always have patience to wait for the right moment.
And shoot (Trade) when you are sure i.e. when your strategy/Setup is giving you permission. Afterall it’s your
hard-earned money

3. Hierarchy:
In army we have hierarchy of posts like division, section, platoons, battalion, brigades each of them are different
based on their skills and experience in the same way we do have certain hierarchy from amateur to pro trader.
It’s not at all easy to make million here, things takes time, hard work, dedication and above all guidance and
experience
Always remember “stock market is the most difficult way to make easy money”

4. Divide And Rule:

Always divide your capital in parts and never ever risk all at once no matter how great the setup is.
We always recommend to divide your capital into 10-20 parts and at a time risk only 1 part of it.

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5. Always Have A Plan:
Always have your trading plan and keep working as per it. Note down all the learnings, strategies and key
points.
Follow them strictly and along with that keep on updating it but only when you found some hole in it.
Every strategy is fruitful only when you apply and practice it for longer time

6. Revenge Trading:
Revenges does not work in stock market. Never ever have “Getting money back” mindset. If you have made
losses just accept it as a part of trading and focus on the next trade.
It is recommended to change this kind of mindset even if you are an experienced trader with a trading edge.
your previous trade should not affect your current trade.
I have seen people in stock market who start with 10k and end up losing 100k and the only reason on Revenge
trading

“When sharp losses in equity are experienced, take time off. Close all trades and stop trading for several days.
The mind can play games with itself following sharp, quick losses. The urge ‘to get the money back’ is extreme,
and should not be given into.” …Richard Rhodes

7. Attack With Edge:

An army do not attack unless they have some edge over the opponent the same rule applies for trading.
Trading edge comes from navigating the market in bullish as well as bearish sentiment. You must not trade
when you don’t have that edge.
The bull market is when the market is rising and you can have an edge if you are looking to buy stocks. The
market is bearish when it is falling. You can have a trading edge if you are about to sell stocks. You must not
trade when the market is uncertain, because you cannot have an edge in such a kind of market conditions.
You are a trader, so trade only when there are opportunities

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 OTHER GENERAL RULES TO BE FOLLOWED

1. Over Trading:
Never ever over trade. It is like Over drinking. There are high chances of vomiting (Losses)
All your profit can go into losses so always stick to your discipline and rules

2. Never Follow The Crowd:

Long-term profitability requires positioning ahead of or behind the crowd, but never in the crowd because that’s
where predatory strategies target. Stay away from stock boards and chat rooms, where people are less than
serious and many of them have ulterior motives. Market is meant to be trap general crowd.
Always remember “To make profit in market leave everything and do opposite of what general public is doing”

3. Patience:
When you rush to make profit in every trade, you would likely encounter many losses. Not every bullish and
bearish market will bring you big opportunities. So, you must sit back, keep the temptation away from trading
and have a great deal of patience

4. Cut Your Losses Early:

Never ever carry your losses. Losses are the part of game and you simply cannot avoid it.
Just accept your mistake, book loss and get out of the trade. There will be number of opportunities in future as
well.
Many people know they have taken the wrong trade but instead of taking exit their hopefulness attitude
doesn’t allow them to cut it. And in the end, it leads of bigger financial disaster

5. Never Rely Too Much On Tools:

Some traders try to make up for insufficient skills with expensive software, indicators, prepackaged with all sorts
of proprietary buy and sell signals. These tools can interfere with valuable experience when you think the
software is smarter than you are. Use tools that fit well with your trading plan, but remember that, ultimately,
you should be the one calling the shots. Your ultimate view should not be based upon the tools instead use
these tools to confirm your view

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6. Mental Peace:
Mental peace is important just as your trading capital. Be calm and confident, have peace in your heart and
mind, be focused and determined when you are trading. Trading with fear and doubt always leads to losses
If you lose your financial capital you may work and get it back, but If you lose mental peace, you are out of the
game.
You might fall into vicious cycle and your mind will make way to more fear and doubts.
Just Focus on the process; everything will happen correctly.

7. Take It As A Business:
Consider stocks market as a business where you just cannot win all the times. There is a famous saying “you can
make money even when you are right 6 times out of 10”.
Leave the thought of being a perfect trader, there is no such things. Trading is completely related to future
events which are absolutely uncertain so just accept the fact that you cannot be right all the time.

The 24 rules of W.D Gann: These are the rules which are noted down from his two very well-known books “The
truth of stock tape” and “45 years in wall street”

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 W. D. Gann’s Cardinal Stock Trading Rules

1. Amount of capital to use: Divide your capital into 10 equal parts and never risk more than one-tenth of

your capital on any one trade.

2. Use stop loss orders: Always protect your capital

3. Never overtrade: This would be violating your capital rules.

4. Never let a profit run into a loss: After you once have a profit raise your stop loss order so that you will

have no loss of capital.

5. Do not buck the trend: Never buy or sell if you are not sure of the trend according to your charts and

rules.

6. When in doubt, get out and don’t get in when in doubt.

7. Trade only in active markets. Keep out of slow, dead ones.

8. Equal distribution of risk: Trade in two or three different instruments if possible. Avoid tying up all your

capital in any one commodity.

9. Don’t close your trades without a good reason. Follow up with a stop loss order to protect your profits.

10. Accumulate a surplus. After you have made a series of successful trades, put some money into a surplus

account to be used only in emergency or in times of panic.

11. Never buy or sell just to get a scalping profit.

12. Never average a loss. This is one of the worst mistakes a trader can make.

13. Never get out of the market just because you have lost patience or get into the market because you are

anxious from waiting.

14. Avoid taking small profits and big losses.

15. Never cancel a stop loss order after you have placed it at the time you make a trade.

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16. Avoid getting in and out of the market too often.

17. Be just as willing to sell short as you are to buy. Let your object be to keep with the trend and make

money.

18. Never buy just because the price of a commodity is low or sell short just because the price is high.

19. Be careful about pyramiding at the wrong time. Wait until the commodity is very active and has crossed

resistance levels before buying more, and until it has broken out of the zone of distribution before selling

more.

20. Select the commodities that show strong uptrend to pyramid on the buying side and the ones that show

definite downtrend to sell short.

21. Never hedge. If you are long one commodity and it starts to go down, do not sell another commodity

short to hedge it. Get out at the market: Take your loss and wait for another opportunity.

22. Never change your position in the market without a good reason. When you make a trade, let it be for

some good reason, or according to some definite rule; then do not get out without a definite indication of

a change in trend.

23. Avoid increasing your trading after a long period of success or a period of profitable trades.

24. Never limit your buy or sell orders. Always use trailing stoploss to get the maximum out of it

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 THANK YOU
Do provide your valuable feedback, suggestions
about the notes and sessions on our mail id
“[email protected]”

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