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10 Tips for Traders

  
  Education
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1. Bulls make a little. Bears make a little. Pigs get slaughtered
In other words, do not be a greedy trader. If you are a bull, don’t expect to get in at the bottom and out at the top. If you are a bear, don’t expect to pick an exact market top and ride a market all the way down to the lowest low. Thinking otherwise allows the destructive “greed” emotion to take over. Greed has been the ruin of many traders.

2. Any fool can get into a market, but it’s the real pros that know when to get out
Indeed, market entry is certainly an important element of successful trading. However, exiting the trade is paramount. Many times a traders will allow a market to “go against” him or her for way too long and way too far–meaning big trading losses. See next item.

3. Use protective buy and sell stops
One of the major mistakes many traders make is not using protective buy and sell stops when they enter a trade. Or, traders may pull their protective stop, “hoping” the market will turn in their favor. Don’t be fooled into using “mental stops.” Determining where to place protective buy and sell stops BEFORE market entry is one of the best money-management tools available. (more…)

Warren Buffet’s Investment & Life Wisdoms

  
  Education
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Spending: If you buy things you don’t need, you’ll soon sell things you need.

Savings: Don’t save what is left after spending; spend what is left after saving.

Hard work: All hard work brings profit; but mere talk leads only to poverty.

Laziness: A sleeping lobster is carried away by the water current.

Earnings: Never depend on a single source of income.

Borrowings: The borrower becomes the lender’s slave.

Accounting: It’s no use carrying an umbrella, if your shoes are leaking.

Auditing: Beware of little expenses; a small leak can sink a large ship.

Risk-taking: Never test the depth of the river with both feet.

Investment: Don’t put all your eggs in one basket.

I will not…

  
  Education
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1- “I will not alienate my friends and antagonize my family by reminding the world on every possible occasion how right I was about the upturn – or downturn – in steels, motors, airlines, or whatever.
2 – When I buy a stock I will not mobilize all the good news to make it look pretty. I will try to consider both the favorable and unfavorable angles as impartially as I know how.
3 – I will not close out a stock position that is doing well by me for no other reason than that I have a profit. I will not cut short my gains in a good situation.
4 – I will not hang on to a stock that is persistently going against me. I will limit my loss and close out any position that seems to have gone really bad before I am in danger of serious trouble.
5 – I will not be swayed or panicked by news flashes, rumors, tips, or well-meant advice.
6 – I will not put all my eggs in one basket nor will I be swept off my feet to plunge into some unknown or low-priced stock on a purely emotional basis.
7 – I will not attempt to tell the market what a stock ought to be worth. I will try to understand what the market has to tell me about what people are willing to pay for it.
8 – I will never forget that I am not in the market primarily to prove – to my broker, my friends, my wife, etc. – that I am smarter than everybody else, but to protect and, if possible, to augment my capital.”

5-Costly Trading Mistakes

  
  Education
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1.  Undercapitalized.  If the trader does not have the adequate capital to trade with, then money, not learning how to trade, will be the primary focus.  Few, if any, ever succeed trading scared money.

2.  Overtrading.  The idea is to make money and keep it, not give it all back because of recklessness.  There is no such thing as being perfect when it comes to trading. Overtrading will easily prove just how imperfect you are. 

3.  Trading Too Many Markets.  Learn to be a specialist because in trading it is best to put all your eggs in one basket while knowing how best to watch and protect that basket very closely.

4.  Believing You Are Invincible.  Few activities teach humility as well as trading.  Seasoned traders respect the risk while novice traders treat success as their birthright.

5.  Lack of Dicipline.  You have to have a game plan when trading.  Failure to have a plan betrays your lack of discipline and feeds your desire to trade off the cuff.  Trading this way is a recipe for disaster.  Just ask someone who has tried it.

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