A common quality of successful stock investor is the ability to follow his rules and a steadfast ability to think independently. Experience is the best learning curve and this will serve to develop a guiding principles that will shape your investment philosophy.
If you apply the precepts this book and think for your self, you'll be well on your way
" NO RULE WILL WORK UNLESS IT IS PUT INTO PRACTICE" - as the year end, I always compile and summarize my trading mistakes and lessons.The following rules can be roughly categorized into those that will help me to master my emotions and will therefore aid me in RISK control for next year trading.
1.Before taking a position, determine exactly where the stock you are watching, or the general market,stands A careful and deep study of price, activity, time and volume will help in this respect.
2. Whatever is hard to do in the market is generally the right thing; and whatever is easy is usually the wrong thing to do. CUT LOSS
3. Never average a loss. Do not buck the trend.
4. Don't treat your losses lightly; they are serious. You are losing actual currency
5. Avoid Uncertainty. when the trend is in doubt, stay out.
6. Never be sentimental about a stock.
7. Ask yourself what you really want. Many traders loose money because subconsciously their goal is entertainment, NOT PROFITS.
8. Learn to wait. Be patient.
9. Eliminate trust in any system you do not understand, but still believe in the basic idea of the system.
10. Let your profits RUN. cut your losses SHORT.
11. There is such a thing as luck, but it does not hold all the time.
12. Never ENTER into a position without FIRST establishing a Risk Reward.
13. Never BUY just because the price of a stock is low or sell short just because the price is high.
14.Don't close your trades without a good reason. Follow up with a stop loss order to protect your profits.
15.Avoid getting in and out of the market too often.
16. Avoid taking small profits and big losses.
17. Take an occasional mental inventory to find out exactly where you stand.
18. Don't listen on tips. Good tips are scarce and they take along time to materialize.
19. Trade with the trend. " The trend is your friend"
20. TRADE WITH A PLAN AND STICK TO IT
Constantly Analyze your mistakes. When we are successful, we tend to think that this process arises from hard work and good judgement. Rarely do we attribute it to chance or the luck of being in the right time. On the other hand when things go against us, we often blame out setbacks on bad luck. It is only when we have made a mistake that we can begin to take the responsibility for our own actions and learn from those mistakes.
"there are no certainties in this investment world, and where there are no certainties, you should begin by UNDERSTANDING YOURSELF" - James L. Fraser
Note taking simply gives me a good result on refining my strategy.
update portfolio as of March 21, 2016
update portfolio as of March 28, 2016
Great points raised in your article. I can relate to most of these. It's true that we need to be vigilant and find a good place to position. Thank you for these tips.
ReplyDeletethanx sir
ReplyDeleteas long as ur initial entry is a low risk one, averaging down is a good strategy imho,this strategy made me money 49% ytd, stocks mostly are reverting to mean
ReplyDeleteshow current port please thanks
ReplyDelete