Friday, April 18, 2008

The Eleven Commandments of Trading

We take our readers in to this Spring April weekend with this quote from Mark Twain: "The first half of life consists of the capacity to enjoy life without chance; the last half consists of the chance without capacity." Even on bullish days like today, don't lose sight of the 11 Commandments so that your money is always defended, and your chance to enjoy life occurs earlier than later! Until Saturday night's 'Psychology in the Upcoming Week's Earning's and Economic Data', we leave you with the Commandments. 1. Never trade more than 10% of your total capital/account value in any one position. 2. Cash is King. 3. Cut losses to 15% maximum whenever possible. If your psyche is shaken, step away and don't trade for 1 week. 4. Take and enjoy profits of 30% or more. 5. Never fall in love with a stock and never force trades or over trade; remember commandment #2. 6. Never accept excuses from management, period. 7. Use technical and fundamental data & psychology/sentiment from the conference call to select trades. 8. There are two sides to the market, long & short; take advantage of that leverage. 9. Understand the significance of the macro geo-political economic environment. 10. Unforeseen events/shocks will happen, inverting the market upside down (remember commandments #1 & #2) 11. All of the above are void without reading the Psychology of the Call.

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