Try to find a long term trend and ride it up. Stay with the trend and don’t be tempted to grab a quick profit. Patience is one of the most important traits of a trend follower.- Be careful not to be shaken out by market fluctuations. Instead try to sit tight as long as there are no warnings showing up. Prices that come back so that your initial gain halves are not necessarily a reason to sell.
- Big wins can only be achieved with major trends. Find them and don’t hesitate to buy at high prices when you may think it is too late. A market is never too high to buy or too low to sell.
- Necessary is of course a stop loss near the entry point. A stop is the easiest way to put your capital at work on a trend, because otherwise you are too often and too long stuck in a trading market which goes nowhere or worse in a falling market.
- Absolutely forbidden is averaging down or fighting the market trend.
- To think that a market is cheaper now after prices came down and therefore must offer a better chance than it did when prices were higher, will put you in the wrong stocks at the wrong times.
- Never try to sell at the top. The trend may continue. Sell after a reaction if there is no rally.
- On the other hand don’t expect the market to end in a blaze of glory. Look out for warnings.
- Tape reading can tell you only that something is wrong. Don’t try to analyze the flow of transactions as the tape shows them in too much detail.
- Don’t look for breaks. Look out for warnings.
- Pyramid stocks only if the initial investment shows a gain.
- Look out for normal market behavior. If a market doesn’t act right, don’t touch it.
- If in a bear market a complete demoralization develops suddenly it may be a sign for a starting bull market.
- Observation of the market gives the best tips of all. Follow your experience to exploit them, while sticking to facts only.
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Try to find a long term trend and ride it up. Stay with the trend and don’t be tempted to grab a quick profit. Patience is one of the most important traits of a trend follower.The Most Important Lessons from Business
Number 1 is never to get in over your head. Not having staying power will prevent you from reaping the benefits that occur on those small number of businesses you own that need just a little bit more before striking the gusher.
Number 2 is never under any circumstances accept an offer out of the clear blue sky for your share of the business that seemingly is good, but where the party offering you the buyout knows much more than you do. I have lost millions on many occasions by accepting a quick profit in a deal where it turned out if I waited a year or two or three, I would have realized a tremendous windfall.
Number 3 is not to mix romance with business. Romance should come out of business not business out of romance. The romantic aspect will cause a strain and make you look foolish too all your colleagues.
Number 4 is not to have 3 person partnerships as too many coalitions can form, and you will be involved in diplomacy rather than business.
Number 5 is to keep your business consistent with the idea that has the world in its grip. Give your customers what they want, and give returns and the customer is always right.
Number 6 is to be sure that you are aligned with the forces in Washington that control so much of life these days, and have so much in perks and profits to give to their cronies.
Number 7 is to associate yourself with good partners, and good friends, and good employees whose loyalty goes beyond the dollar or the clock. An ounce of loyalty and integrity is worth more than a pound of immediate profits. When the going gets tough, and it always does in business, you need to have the loyal ones. Certain groups and certain belief systems are aphoristic and proverbial for their disloyalty and tendency to deceit and they should be avoided.
Number 8 is to always remember that when dealing with a family business, the loyalty of the family members is to themselves but not to you. The worst short term frauds and cons, and some of the worst long term cons, I have been victimized in had a father and son working in concert to deceive you into giving them your chips. (more…)
Some behaviors that virtually guarantee losses in the markets
• Lack of discipline: It takes an accumulation of knowledge and sharp focus to trade successfully. Many would rather listen to the advice of others. They just want to believe, like Fox Mulder.
• Impatience: Some have an insatiable need for action. The day trading adrenaline rush and the gamblers’ high can have heroin-like addiction pull.
• No objectivity: Some are unable to disengage emotionally from the market. They create a virtual “lifelong” marriage to their trades. Divorce is not an option.
• Greed: A desire for quick profit blinds many from the diligent work needed to actually win in the long run.
• Refusal to accept truth: Some do not want to believe that the only knowable truth is price action. They feel more secure following cult leaders serving Kool-Aid.
• Impulsive behavior: Many jump into investments based on the morning paper or Good Morning America. Thinking that if you act quickly, somehow you will beat everybody else in the great race is a recipe for a messy failure.
• Inability to stay in the moment of now: To be a successful trader, you cannot spend your time thinking about how you are going to spend your profits. Trading because you have to have money is not workable.
• Stay open-minded: Come into the day knowing your future steps. Do not be stubborn when the market does not go your way. Cut your losses and follow your stinking trading plan.
• Avoid false parallels: Just because the market behaved one way in 1995, 2000, or 2008 does not mean a similar pattern today will give you the same result. A great example of this: The Hindenburg Omen. It is a technical analysis pattern that is said to portend a stock market crash. The problem: Sometimes it is right, sometimes not. You don’t want to bet your life savings on a coin flip.