Time Tested Rules (Part 1)

timetestedrulesOptimism means expecting the best, but confidence means knowing how you will handle the worst. Never make a move if you are merely optimistic.
Take a trading break. A break will give you a detached view of the market and a fresh look at yourself and the way you want to trade for the next several weeks.
It is a safe bet that the money lost by (short term) speculation is small compared with the gigantic sums lost by those who let their investments “ride”. Long term investors are the biggest gamblers as after they make a trade they often times stay with it and end up losing it all. The intelligent trader will . By acting promptly—hold losses to a minimum.
People who buy headlines eventually end up selling newspapers.
Never give advice—the smart don’t need it and the stupid don’t heed it.
Disregard all prognostications. In the world of money, which is a world shaped by human behavior, nobody has the foggiest notion of what will happen in the future. Mark that word—nobody! Thus the successful trader bases no moves on what supposedly will happen but reacts instead to what does happen.
A bull market needs to be fed every day , a bear market only once a week.
Remember that it’s better to trade a few big moves a year (and close them out profitably) than to trade constantly.
Worry about how much you can lose. Figure risk reward ratio ahead of trade. Strive for at least 3x potential profit vs. loss.
Reevaluate your position in the market if charts have deteriorated and fundamentals have not developed as you expected.
More to follow….