| Plan your trade and trade your plan. |
| The successful
trader is not afraid to buy high and 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. |
| 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. |
| 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, or poor. |
| 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 be 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 go 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 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. |
