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zaphod
zaphod
P&P Score: 99.70   Points: 759.50   Accuracy: 74.26%   Average Pick Score: 3.02   Annual Return: 29.93% (18.78% since 8/5/09)  

zaphod's Blog : 4 simple rules for trading

Date August 11, 2009    Comments Comments (3)    Recommended (80)   
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There are thousands of possible choices to make when choosing a stock, etf, or bond. It's easy to get lost in a sea of indecision when there are so many variables that make the price of stock on a given day, (earnings, price to sales, supply and demand, sector performance, etc...). A set of very basic trading rules is a necessity. Here are some of mine...

1. Price Matters.-nothing is more important. There has to be a very solid justification to pay up for a stock.
2. New highs beget new highs. -simply put, it's easier to hold on to a stock when you have a profit in it. When a stock hits new highs, everyone has a profit, so more people wait to sell.
3. New lows beget new lows. -corollary to 2.
4. Find a group to trade with. -bouncing ideas off others is one of the healthiest ways to get better at trading.
zaphod


3 Comment(s):

Author TickerBandit     Date August 11, 2009 06:35
A+ :-)
Author BSNBC     Date August 13, 2009 15:48
5. There are many ways to make money in the markets. Read Market Wizards and you will be surprised at the different ways. Some people are day traders/swing/ or long only. others only trade the short side, currencies, commodities, etc.
find your style at and always be willing to learn and be humbled by the markets
Author sporthunter     Date February 19, 2010 17:41
Nice piece - If I can add to the comments, follow a few stocks and learn their patterns and trading ranges. Know your entry point and exit point. Be willing to take some profits even if you might leave some on the table. Biblical teaching here: after the harvest, they were command not to pick up the spillage at the edges of the field, but to allow the less fortunate to have some of the harvest. Greed never pays in the end. learn to take your profits. Happy Trading
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