1) Decide the ENTRY Price at which you make a purchase

[20% of your trading success lies here]

2) Decide the EXIT Price at which you will sell

[20% of your trading success lies here]

3) LIMIT your Risk: Cut your losses short with a stop loss of 7-10% of your original investment cost

[50% of your trading success lies here]

This means that you must sell whenever your Drawdown (unrealized loss) reaches the 10% critical level

This third rule is a RIGID Risk Control Rule which will minimize your
chances of getting ruined over time and enable you to
survive at a trader over the long run

4) MANAGE your Risk: Optimize your Trade Size

[This includes the Money Management Long-term survival Rule of thumb which in essence means
that you must CAP the size of your bets to Max 3% of your Trading Equity]

Managing your Risk requires to calculate the optimal bet size (in % of your portfolio) which will both maximize the growth of your trading account
while minimizing the chances that you get wiped out (i.e unable to trade because your trading capital is depleted)
This is based on a common sense rule: It is only worth for you to trade if your most probable (expected) profit is higher than your most probable (expected) loss
Want to know more ? Have a look at how to size your trade
Also check out the Kelly Criterion; and if you are really interested in the art of betting try: Kellytools