“Technical analysis is a windsock, not a crystal ball. It is a skill that improves with experience and study. Always be a student, there is always someone smarter than you!
“Thou Shall Not Trade Against the Trend.”
Let volatility work in your favor, not against you.
Emotions can be the enemy of the trader and investor, as fear and greed play an important part of one’s decision making process.
Portfolios heavy with underperforming stocks rarely outperform the stock market!
Even the best looking chart can fall apart for no apparent reason. Thus, never fall in love with a position but instead remain vigilant in managing risk and expectations. Use volume as a confirming guidepost.
When trading, if a stock doesn’t perform as expected within a short time period, either close it out or tighten your stop-loss point.
As long as a stock is acting right and the market is “in-gear,” don’t be in a hurry to take a profit on the whole positions, scale out instead.
Never let a profitable trade turn into a loss and never let an initial trading position turn into a long-term one because it is at a loss.
It’s not the ones that you sell that go higher that matters, it’s the ones you don’t sell which go lower, that do.
Don’t think you can consistently buy at the bottom nor sell at the top. This can rarely be consistently done. (more…)
Be responsible for your own trading destiny. Analyze your trading behavior. Understand your own motivations. Traders come into Future trading with a view to making money. After awhile they find the trading process to be fascinating, entertaining and intellectually challenging. Pretty soon the motivation to make money becomes subordinated to the desire to have fun and meet the challenge. The more you trade to have fun and massage your ego, the more likely you are to lose. The kinds of trading behaviors that are the most entertaining are also the least effective. The more you can emphasize making money over having a good time, the more likely it is you will be successful.