Elements of Trading
|
By Philip Wik 1. My "no Asian land wars" rule. Never buy or hold into a down stock, market, or group trend. 2. Buy strength, volume, and leadership. Sell weakness or uncertainty, 3. Cut losses. Cut if the price falls below the moving average or a prior price support. 4. Don't panic sell. Allow for down-drifts. 5. Don't be afraid to buy the same stock at a higher price. 6. The Golden Swan chart formation is often a money maker-- a plateau, a rise in price on rising volume, a dip on some profit selling, and a break out (the "goose head") into virgin territory (no overhead resistence) on strong volume in a bull market. 7. Random walks, efficient markets, and contraryism are persistent voices of disinformation. 8. Buy with the trend. Don't try to predict the trend. Bad begets bad, good begets good, excess begets reaction. 9. For security, diversify. For success, concentrate. Make meaningful investments. Concentration can only work if you are out of the market most of the time. 10. Sit tight. Let profits run. 11. Think and take responsibility for yourself. Absorb information but don't take advice. 12. Trade in high volatility high liquidity markets. 13. In buying, scale up. In selling, liquidate all. Ignore volume when price erodes. 14. The voice of the market is the voice of God, all knowing, all powerful. It's ways are not our ways. 15. Attitudes have consequences. Master your thoughts and you will master the markets. Instead of hoping, you must fear. Instead of fearing, you must hope. 16. Nature is a curved line. Nature trends. Study nature, such as the behavior of animal herds, ocean tides, weather systems, and abnormal psychology. 17. Take an electic approach, embracing both technical and fundamental. Prior quarter and comparative annual quarter earnings are good markers of stock trends. 18. Exercise patience. Don't overcommit or overtrade. 19. Fade the state. 20. If you are in hole, stop digging. Sell what shows a loss, keep what shows a profit.
|