When considering best trading practices, it’s easy to discard the idea as too general and simplistic, or to default to the industry’s well-worn cliches. However, for both new and experienced traders, there are several rules that constitute a sound approach to trading.

Although it takes time, effort and money, lessons are more lasting when dealt by the uncompromising hand of experience. In one trading venture, I made so many mistakes that the only steps I didn’t take represent a solid summary of what you should do.

After quitting a safe job at a major U.K. firm for a considerably more risky role with a startup, your humble correspondent came across an untested personal opinion that an unproven U.S.-based software company, Select Software Tools, had strong growth prospects. That was all the research this would-be trader needed to justify a significant financial investment.