Richard Dennis was a trader who trades the Futures market (during the 70s and 80s).

His rise to fame came when he was featured in Market Wizards as he took a $400 trading account and turned it into $200 million.

Here are 10 pieces of trading advice from the market wizard...

1/ A good trend following system will keep you in the market until the trend has changed

There’s no way to predict how high the market will go.

So, the next best thing you can do is trail your stop loss as the market moves in your favor.

2/ When you have a position, you’ve got to keep it until the reason no longer exists

If you want to be a profitable trend follower, you must follow your rules and exit your trades only when the reason no longer exists.

3/ You should expect the unexpected in this business; expect the extreme

You can never tell if the market is too high to buy or too low to short.

Because what’s high can go higher and what’s lower can go lower.

4/ Trading decisions should be made as unemotionally as possible

Here’s how…

• Develop a trading plan
• Risk management
• Focus on executing your trading plan consistently
• Don’t get swayed by the short-term results

5/ Trade small because that’s when you are as bad as you are ever going to be

In trading, you want to trade small because you’ll make mistakes — plenty of it.

So, why pay more in tuition fees to Mr Market when you can do so at a fraction of the cost?

6/ Focus on the price

The things that matters are...

• Buy what’s going up
• Sell what’s going down
• Repeat

7/ It’s not too wise to have your stop where everyone else has their stop

This means don’t place your stop loss smack under Support, or just above Resistance.

Instead, set your stop loss away from price structure.

8/ There are more false breakouts

Not all breakouts will work out.

However, it doesn’t mean trading breakouts is a losing strategy.

Remember, it’s not how often you win that’s important.

It’s how much you win when you’re right and how much you lose when you’re wrong.

9/ It's misleading to focus on short-term results

Your short-term results are random.

Because when you’re dealing with probabilities, anything is possible in the short run.

It’s only in the long run that your results will align towards its expected value.

10/ Trading has taught me not to take conventional wisdom for granted.

If you want to succeed in this business, you must test everything.

Trust nothing but question everything.

Want more trend-following stuff?

Here are some useful books on it...

•Following The Trend by Andreas Clenow
•Trend Following by Michael Covel
•The Complete Turtle Trader by Michael Covel

Do you trade the stock markets?

Then join me at my upcoming web class.

You'll discover how you can earn an extra 10%, 20%, or even 40% a year without studying technical analysis, analyzing financial reports, or following the news.

Sign up here (free)... http://tradingwithrayner.com/sts/ 

Recap (1/2)

1/ A good trend following system will keep you in the market

2/ Keep your trade until the reason no longer exists

3/ Expect the unexpected

4/ Make trading decisions as unemotionally as possible

5/ Trade small

Recap (2/2)

6/ Focus on price

7/ Set your stop loss beyond the price structure

8/ There are more false breakouts

9/ Don't focus on short-term results

10/ Don't take conventional wisdom for granted