Daytrading rules

There are many commonly known rules for the daytrader. Here I sum up the ones that I believe to be true and try to reason why.

Rule
Keep your losses small, and let your profits run Most people seem to do the reverse. When they are in a losing position they let it go thinking the market will turn. Eventually they close with a unexpected loss. Some people take small profits just to secure some profit, this while the market is still moving into their direction. Be carefull however. Do not set your stop to close to the market. You will be stopped out easily on down spikes. Set your stop to a reasonable level. Look at the last low going long, and put the stop just belong, and the reverse going short : Look at the last high and put a stop just above.
Trade with the trend Trade always with the dayly trend, and if you are not sure what the trend is look at different time intervals. For instance if you work of 5 minute candles also look at 1 hour or daily candles to dertermine the trend. Counter trend trading in overbought or over sold situations is risky and difficult. Try to get into a low point in an upgoing trend to go long or a high point in a downgoing trend to go short.. To see easily if you are above or below the trend set a longer term moving average of 100 or 200 bars.
Do not stop and reverse your position Some people keep turning around a position once they start losing. Always look at your trade setup again and relax.
Accept losses as part of life You can not have only winning trades, otherwise you would not be reading this. Prepare to lose some and make it at zero sum game everytime. Don't stop after your first loss, and have good money management.
Keep an eye on statistics. If you are an average trader, and you have 50% good and 50% bad trades make sure your profit targets are higher then your stop loss. Working with a 2 point profit target and a two point stop loss means you have to have more then 50% trades profitable, otherwise you will be losing money (on the cost of the trade).
Give the market some room If you are not scalping the markets keep a stop loss that is big enough to have the market move around a little. Most of the time the market will move into both positions during your trade. Skalping the markets is a bad idea in general since you will be always behind the professionals and do not forget slippage and costs.
Be careful of sideway markets The markets move sideways 60 to 70 % of the time. There are special trading techniques for this type of market. Study the market movements first.
Don't forget trading is a profession Do not forget that financial markets are a profession. Learn and study before doing.
Paper trade before you go into live action to see if your daytrading method works There are good simulation programs out there that work with you data feed and can simulate orders.
Get good software As with any profession you need good tools. The minimum you need is a good data feed a good charting program and a good order entry program. Sometimes they are combined into one package. People always think they do not have to spend money on tools, but buy the most expensive do it your selve tools just to hang a bord on the wall, or to mow there lawn.
Keep records Keep good trading records, and review what worked an what did not. Learn from both your mistakes and your sucesses.