 |
Plan your trade and
trade your plan. |
|
|
The successful
trader is not afraid to buy high & sell low. |
|
|
Avoid getting out
of the market just because you have lost patience or getting
into the market because you are bored. |
|
|
Avoid getting in or
out of the market too often. |
|
|
The most profitable
trading tool is simply following the trend. |
|
|
Losses make the
speculator studious -- not profits. Take advantage of every loss
to improve your knowledge of market action. |
|
|
The most difficult
task in speculation is not prediction but self control.
Successful trading is difficult and frustrating. You are the
most important element in the success equation. |
|
|
The basic substance
of price change is human emotion. Panic, fear, greed,
insecurity, anxiety, stress, and uncertainty are the primary
sources of short term price change. |
|
|
Avoid allowing a
big winning trade to turn into a loser. Stop yourself out if
market moves against you 20% from your peak profit point. |
|
|
Successful trading
requires four things. Knowledge, disciplined courage, money, and
the energy to merge the first 3 properly. |
|
|
Expect and accept
losses gracefully. Those who brood over losses always miss the
next opportunity, which more than likely will be profitable. |
|
|
The key to
successful trading is in knowing yourself and in knowing your
stress point. |
|
|
Since there is
always the possibility of surprise in thin, dead markets, less
capital should be risked there than in markets which are broad
and moving. Limit the risk in any one trade to a maximum of 10%
and the risk in all open trades to a maximum of 25% of
trading capital (risk=percent of available capital). Determines
this each day, adding profits and subtracting losses in open
trades, and combine this net figure with your trading capital. |
|
|
Believe that "the
big one is possible" -- be there when it starts. Have the power
to act, be rested mentally and physically, and cut your losses
quickly. |
|
|
Have you taken a
loss? Forget it quick. If you have taken a profit, forget it
quicker. Don't let ego and greed inhibit clear thinking and
hard work. |
|
|
Somewhere a change
is occurring that can make you rich. |
|
|
Recognize that
weather markets are inherently more volatile. Therefore, widen
out your stops and give market plenty of room to move so it
doesn't take you out prematurely. |
|
|
Re-evaluate your
position in the market if charts have deteriorated and
fundamentals have not developed as you expected. |
|
|
Beware of large
positions that can control your emotions and feelings. In other
words don't be overly aggressive with the market. Treat it
gently, allowing your equity to grow steadily rather than in
bursts. |
|
|
Capital
preservation is just as important as capital appreciation. |
|
|
When a market's
gotten away and you've missed the first leg you should still
consider jumping in even if it is dangerous and difficult. |
|
|
Work hard at
understanding the key factor(s) motivating the market(s) you are
trading. In other words, the harder you work the luckier you'll
be. |
|
|
Never add to a
losing position. |
|
|
The news always
follows the market. |
|
|
To buy on a rising
market is a most comfortable way of buying. Buy on a scale up.
Sell on a scale down. |
|
|
Commodities are
never too high to begin buying or too low to begin selling. But
after the initial transaction, avoid make a second unless the
first shows a profit. |
|
|
The principles of
successful commodity speculation are based on the supposition
that people will continue in the future to make the mistakes
that they have made in the past. |
|
|
Don't pioneer highs
or lows. Let the market tell you a high or low has been made. |
|
|
As go the oats, so
goes the feed grain markets. |
|
|
Except in unusual
circumstances, get in the habit of taking your profit too soon.
Don't torment yourself if a trade continues winning without you.
Chances are it won't continue long. If it does, console yourself
by thinking of all the times when liquidating early preserved
gains you would otherwise have lost. |
|
|
Avoid getting
rooted in a trade because of the feeling that it "owes" you
something -- or, just as bad, the feeling that you "owe" it
enough time to show what it can do. If it isn't going anywhere
and you see something better, change trains. |
|
|
Optimism means
expecting the best, but confidence means knowing how you will
handle the worst. Avoid making a move if you are merely
optimistic. |
|
|
Repeatedly
re-evaluate your open positions. Keep asking yourself: would I
put my money into this if it were presented to me for the first
time today? Is this trade progressing toward the ending position
I envisioned. |
|
|
What was once
support, now becomes resistance. The reverse is also true. What
was resistance, now becomes support. |
|
|
As a rule of thumb,
good trend lines should touch at least three previous highs or
lows. The more points the line catches, the better the line. |
|
|
In bull markets,
sell signals will not always work, and in bear markets, buy
signals will not always work. |
|
|
The clearest and
easiest way to determine a trend is from previous highs and
lows. Higher highs and higher lows mark an up trend, lower highs
and lower lows mark a downtrend. |
|
|
Standing aside is a
position. |
