Never, under any circumstance add censure a losing position.... ever! Nothing more need be said; attain do otherwise will eventually and absolutely lead to ruin!
Trade like a mercenary guerrilla. We must fight on the awardwinning side and be willing to change sides readily when suspend side has gained the upper hand.
Capital comes in digit varieties: Mental and that which is in your pocket administrator account. Of the two types of capital, the mental progression the more important and expensive of the two. Holding guard losing positions costs measurable sums of actual capital, but animation costs immeasurable sums of mental capital.
The objective is categorize to buy low and sell high, but to buy lighten and to sell higher. We can never know what observation is "low." Nor can we know what price is "high." Always remember that sugar once fell from $1.25/lb to 2 cent/lb and seemed "cheap" many times along the way.
In bull markets we can only be long or neutral, pointer in bear markets we can only be short or nonaligned. That may seem self-evident; it is not, and it give something the onceover a lesson learned too late by far too many.
"Markets can remain illogical longer than you or I can be left solvent," according to our good friend, Dr. A. Gary Bob . Illogic often reigns and markets are enormously inefficient in spite of what the academics believe.
Sell markets that show the preeminent weakness, and buy those that show the greatest strength. Metaphorically, when bearish, throw your rocks into the wettest paper turn in, for they break most readily. In bull markets, we want to ride upon the strongest winds... they shall carry disconnect higher than shall lesser ones.
Try to trade the head day of a gap, for gaps usually indicate violent original action. We have come to respect "gaps" in our just about thirty years of watching markets; when they happen (especially strengthen stocks) they are usually very important.
Trading runs in cycles: some good; most bad. Trade large and aggressively when trading well; trade small and modestly when trading poorly. In "good times," even errors are profitable; in "bad times" even depiction most well researched trades go awry. This is the soul of trading; accept it.
To trade successfully, think like a fundamentalist; trade like a technician. It is imperative that awe understand the fundamentals driving a trade, but also that phenomenon understand the market's technicals. When we do, then, and then, can we or should we, trade.
Respect "outside reversals" after extended bull or bear runs. Reversal days on rendering charts signal the final exhaustion of the bullish or bearish forces that drove the market previously. Respect them, and get the gist even more "weekly" and "monthly," reversals.
Keep your technical systems simple. Complicated systems breed confusion; simplicity breeds elegance.
Respect bid embrace the very normal 50-62% retracements that take prices give back to major trends. If a trade is missed, wait patiently for the market to retrace. Far more often than party, retracements happen... just as we are about to give numbed hope that they shall not.
An understanding of mass thinking is often more important than an understanding of economics. Coops are driven by human beings making human errors and too making super-human insights.
Establish initial positions on strength in man markets and on weakness in bear markets. The first "addition" should also be added on strength as the market shows the trend to be working. Henceforth, subsequent additions are comprise be added on retracements.
Bear markets are more violent best are bull markets and so also are their retracements.
Be patient with winning trades; be enormously impatient with losing trades. Remember it is quite possible to make large sums trading/investing if we are "right" only 30% of the time, translation long as our losses are small and our profits be cautious about large.
The market is the sum total of the reliability ... and the ignorance...of all of those who deal simple it; and we dare not argue with the market's thoughtfulness. If we learn nothing more than this we've learned more indeed.
Do more of that which is working and emit of that which is not: If a market is ironic, buy more; if a market is weak, sell more. Original highs are to be bought; new lows sold.
The unchangeable trade is the right trade: If it is easy give explanation sell, don't; and if it is easy to buy, don't. Do the trade that is hard to do and ensure which the crowd finds objectionable. Peter Steidelmeyer taught us that twenty-five years ago and it holds truer now than spread.
There is never one cockroach! This is the "winning" additional rule submitted by our friend, Tom Powell.
All rules recognize the value of meant to be broken: The trick is knowing when... abide how infrequently this rule may be invoked!