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I would like to play a similar role in helping new traders.”
the
Blighting Never Strikes Twice
The best trades are the ones in which you have all three things going for you: fundamentals, technicals, and market tone. First, the fundamentals should suggest that there is an imbalance of supply and demand, which could result in a major move. Second, the chart must show that the market is moving in the direction that the fundamentals suggest. Third, when news comes out, the market should act in a way that reflects the right psychological tone. For example, a bull market should shrug off bearish news and respond vigorously to bullish news. If you can restrict your activity to only those
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One of my rules was to get out when the volatility and the momentum became absolutely insane.
The first thing I would say is always bet less than 5 percent of your money on any one idea.
Do you always pick a point where you will get out before you get in? Yes, I have always done that. You have to.
Yes, exactly. If you become unsure about a position, and you don’t know what to do, just get out. You can always come back in. When in doubt, get out and get a good night’s sleep. I’ve done that lots of times and the next day everything was clear. Do you sometimes go back in right after you get out? Yes, often the next day. While you are in, you can’t think. When you get out, then you can think clearly again.
Perhaps the most important rule is to hold on to your winners and cut your losers. Both are equally important. If you don’t stay with your winners, you are not going to be able to pay for the losers.
You have to consider whether the market has already discounted your idea.
I don’t trade the Dow stocks. I prefer the little ones, because they are not dominated by the big professional traders who are like sharks eating each other.
Never commit more than 5 percent of your money to a single trade idea.
