Trading Rules

The 10 Commandments of trading by Alexander Grace

1. Stops are the key to success for many traders… limit your loses. Before entering a trade focus on how much you can lose not how much you can make. If you protect yourself you will be surprised by how far your profits run.
2. We do not buy gap ups and we do not sell gaps down. Yes there are exceptions to every rule but we are interested in the highest probability.
3. Remember all markets function the same the one driving factor is that human nature dictates price movement based on panic, fear, greed, insecurity, anxiety, stress and uncertainty. Think with the opposite side of your brain. Nothing is new in stocks. The game does not change and neither does human nature.
4. Mark to market everyday. Know your capital every single day understand the amount of money in your account.
5. Do not let the minute-to-minute or day-to-day swings change your conviction of where the market is going. Stick and stay to make it pay.
6. Of all speculative blunders, there are few greater than selling what shows a profit and keeping what shows a loss. Sell your losers keep your winners its that simple.
7. Be advised that it is better to be more interested in the market's reaction to new information than to be the piece of news itself. People who buy headlines eventually end up selling newspapers.
8. Keep record of your trading results
9. Take a trading break. A break will give you a detached view of the market and a fresh look at yourself and the way you want to trade for the next several weeks.
10. The deepest secret for the trader is to subordinate his will to the will of the market. The market is truth as it reflects all forces that bear upon it. As long as he recognizes this, he is safe. When he ignores it, he is lost.

Trading rules accumulated by an ardent reader of literature on:
The " Art of Speculation "

1. PLAN YOUR TRADES AND TRADE YOUR PLANS.
2. HOPE AND FEAR ARE THE TWO GREATEST ENEMIES OF SPECULATIONS.
3. KEEP RECORDS OF YOUR TRADING RESULTS.
4. MAINTAIN A POSITIVE ATTITUDE NO MATTER HOW MUCH YOU LOSE.
5. DONT TAKE THE MARKET HOME
6. AVOID OVERCONFIDENCE, IT COULD BE YOUR GREATEST ENEMY
7. CONTINUALLY SET HIGHER TRADING GOALS
8. STOPS ARE THE KEY TO SUCCESS FOR MANY TRADERS-LIMIT YOUR LOSSES!
9. THE MOST SUCCESSFUL TRADERS ARE THOSE THAT TRADE LONG TERM
10. THE MOST SUCCESSFUL TRADERS BUY INTO BAD NEWS AND SELL INTO GOOD NEWS
11. THE SUCCESSFUL TRADER IS NOT AFRAID TO BUY HIGH AND SELL LOW
12. SUCCESSFUL TRADERS HAVE A WELL SCHEDULED-PLANNED TIME FOR STUDYING THE MARKETS
13. SUCCESSFUL TRADERS SET PROFIT OBJECTIVES FOR EACH TRADE THEY ENTER
14. DO NOT COLLECT THE OPINIONS OF OTHERS BEFORE ENTERING TRADES--FACTS ARE PRICELESS--OPINIONS ARE WORTHLESS. IN SHORT, SUCCESSFUL TRADERS ISOLATE THEMSELVES FROM THE OPINIONS OF OTHERS
15. CONTINUALLY STRIVE FOR PATIENCE, PERSERVERANCE, DETERMINATION, AND RATIONAL ACTION
16. NEVER GET OUT OF THE MARKET JUST BECAUSE YOU HAVE LOST PATIENCE OR GET INTO THE MARKET BECAUSE YOU ARE ANXIOUS FROM WAITING
17. NEVER CANCEL A STOP LOSS ORDER AFTER YOU HAVE PLACED IT AT THE TIME YOU MAKE A TRADE
18. AVOID GETTING IN OR OUT OF THE MARKET TOO OFTEN
19. THE MOST PROFITABLE TRADING TOOL IS SIMPLY FOLLOWING THE TREND
20. NEVER CHANGE YOUR POSITION IN THE MARKET WITHOUT A GOOD REASON, WHEN YOU MAKE A TRADE LET IT BE FOR SOME GOOD REASON OR ACCORDING TO A DEFINATE PLAN, THEN DO NOT GET OUT WITHOUT A DEFINATE INDICATION OF A CHANGE IN TREND
21. LOSSES MAKE THE SPECULATOR STUDIOUS-NOT PROFITS. TAKE ADVANTAGE OF EVERY LOSS TO IMPROVE YOUR KNOWLEDGE OF MARKET ACTION
22. DEDICATION, PERSISTENCE AND THOROUGHNESS, AND HARD WORK ARE THE KEYS TO INVESTMENT SUCCESS.
23. 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.
24. 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.
25. BULLISH CONSENSUS IS TYPICALLY WHEN THE MARKET IS AT A TOP. ALSO THERE ARE FEW BULLS AT MAJOR BOTTOMS
26. ALWAYS DISCIPLINE YOURSELF BY FOLLOWING A PREDETERMINED SET OF TRADING RULES.
27. WATCH THE SPREADS IE, DONT BE BULLISH IF INVERSES ARE NARROWING.
28. REMEMBER THAT A BEAR MARKET WILL GIVE UP IN ONE MONTH WHAT A BULL MARKET HAS TAKEN THREE MONTHS TO BUILD.
29. IDENTIFY " THE DOMINANT FACTOR " IN EACH COMMODITY. BE PREPARED TO REDIFINE THIS FACTOR AS CONDITIONS CHANGE.
30. MAKE LISTS EVERYDAY SHOWING BULLISH AND BEARISH FACTORS FOR EACH COMMODITY. IF YOU CAN LIST ONLY BULLISH FACTORS, KEEP LOOKING FOR A BEARISH FACTOR, AS IT IS THERE AND IT WILL PROBABLY TURN THE MARKET. THE CONVERSE ALSO APPLIES.
31. EXPAND YOUR SOURCES FOR MARKET INFO BUT LIMIT YOUR SOURCES FOR MARKET OPINION
32. DONT EVER ALLOW A BIG WINNING TRADE TO TURN INTO A LOSER. STOP YOURSELF OUT IF THE MARKET MOVES AGAINST YOU TWENTY PERCENT FROM YOU PEAK PROFIT POINT.
33. YOU MUST HAVE A PROGRAM, YOU MUST KNOW YOUR PROGRAM, YOU MUST FOLLOW YOUR PROGRAM.
34. IT IS NEVER POSSIBLE TO KNOW EVERYTHING ABOUT ANYTHING. A COMMODITY TRADER IS IN CONSTANT DANGER.
35. SUCCESSFUL TRADING REQUIRES FOUR THINGS. KNOWLEDGE, DISCIPLINED COURAGE, MONEY, AND THE ENERGY TO MERGE THE FIRST THREE PROPERLY
36. EXPECT AND ACCEPT LOSSES GRACEFULLY. THOSE WHO BROOD OVER LOSSES ALWAYS MISS THE NEXT OPPORTUNITY, WHICH MORE THAN LIKELY WILL BE PROFITABLE.
37. THE ONE ESSENTIAL INGREDIENT TO MAKING MONEY WITH MONEY AND KEEPING IT IS HAVING AN ORGANIZED EFFORT.
38. UNLESS YOU PROGRESS, YOU GO BACKWARDS. ONCE YOU COMPLETE A TRADING GOAL, IT IS CRUCIAL THAT YOU IMMEDIATELY SET A NEW GOAL.
39. IF YOU BECOME " DISTRACTED " BY MULTIPLE TRADE OPPORTUNITIES CONSIDER SPECIALIZATION. " INTENSITY GIVES EMINENCE AND RISES HEROIC TO MATTERS SUBLIME " .
40. THE ART OF CONCENTRATION CAN HELP YOU BECOME A GREAT TRADER. IN OTHER WORDS SET ASIDE TIME TO THINK, PLAN, MEDITATE, INVESTIGATE, RESEARCH, ANALYZE, EVALUATE AND SELECT YOUR TRADES CAREFULLY.
41. SPLIT YOUR PROFITS RIGHT DOWN THE MIDDLE AND NEVER RISK MORE THAN FIFTY PERCENT OF THEM AGAIN IN THE MARKET.
42. THE KEY TO SUCCESSFUL TRADING IS IN KNOWING YOURSELF AND IN KNOWING YOUR STRESS POINT.
43. THE REAL DIFFERENCE BETWEEN WINNERS AND LOSERS IS NOT SO MUCH NATIVE ABILITY AS IT IS DISCIPLINE EXERCISED IN AVOIDING MISTAKES.
44. THE GREATEST RISK FOR A COMMODITY TRADER IS TO RELY ON HOPE ALONE. NEVER SUBSTITUE HOPE FOR FACTS. THE GREATEST LOSS IS THE LOSS OF SELF CONFIDENCE.
45. YOU CANNOT PERFORM VERY WELL FOR VERY LONG WITH YOUR SHOES NAILED TO THE FLOOR. IN TRADING AS IN FENCING THERE ARE THE QUICK AND THE DEAD.
46. REMEMBER MARK TWAIN: " ONLY 10% OF THE PEOPLE THINK. 10% THINK THEY THINK. THE OTHER 80% WOULD RATHER DIE THAN THINK. "
47. RUN FROM THE TIP AS YOU WOULD RUN FROM THE PLAGUE. REGARD THE TIP PASSER AS ONE WHO KNOWS NOT AND KNOWS THAT HE KNOWS NOT.
48. THE MAN WHO GOES TO THE TOP AS A COMMODITY TRADER DOES NOT DO AS HE PLEASES. HE HAS TRAINED HIMSELF TO CHOOSE CORRECTLY BETWEEN THE TWO FREEDOMS: THE FREEDOM TO DO AS HE PLEASES, AND THE FREEDOM TO DO WHAT HE MUST DO.
49. 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.
50. LIMIT THE RISK IN ANY ONE TRADE TO A MAXIMUM OF 10% AND THE RISK IN ALL OPEN TRADES TO A MAXIMUM OF 25% OF TRADING CAPITAL. DETERMINE THIS EACH DAY ADDING PROFITS AND SUBTRACTING LOSSES IN OPEN TRADES, AND COMBINE THIS NET FIGURE WITH YOUR TRADING CAPITAL.
51. IT DOES NOT TAKE MUCH CAPITAL TO TRADE A MARKET IF ONE HAS KNOWLEDGE AND UNDERSTANDING. ST. PAUL SAID, " WHEN I AM WEAK I AM STRONG. "
52. SPEECH MAY BE SILVER BUT " SILENCE IS GOLDEN " . TRADERS WITH THE GOLDEN TOUCH DO NOT TALK.
53. COMMON TRADING ERRORS INCLUDE; A) TRADING WITHOUT GOOD REASONS. B) TRADING ON HOPE RATHER THAN FACTS. C) OVERLOADING WITHOUT REGARDS FOR CAPITAL
54. " I LIKE THE SHORT SIDE OF THE MARKET BECAUSE THERE IS USUALLY LESS COMPANY " . THE MOB IS USUALLY WRONG. IT IS USUALLY LONG.
55. A FATAL MISTAKE MADE BY THE FUNDAMENTAL TRADER IS TO TAKE SMALL PROFITS. THIS IS THE RESULT OF LIMITED VISION. ---EXTREMES ALWAYS SEEM SILLY TO MEN OF SO CALLED GOOD JUDGEMENT.
56. AND USING CHART ACTION FOR CONFIRMATION AND TIMING OF ENTRY AND EXIT.
57. BELIEVE THAT " THE BIG ONE IS POSSIBLE " ---BE THERE WHEN IT STARTS. HAVE THE GROSS POWER TO ACT, BE RESTED MENTALLY AND PHYSICALLY, AND FINALLY LET YOUR PROFITS RUN AND CUT YOUR LOSSES QUICKLY.
58. DREAM BIG DREAMS AND THINK TALL.VERY FEW PEOPLE SET GOALS TOO HIGH. A MAN BECOMES WHAT HE THINKS ABOUT ALL DAY LONG.
59. COMMODITY TRADING IS THE ART OF REGARDING FEAR AS THE GREATEST SIN AND GIVING UP AS THE GREATEST MISTAKE. IT IS THE ART OF ACCEPTING FAILURE AS A STEP TOWARD VICTORY.
60. 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.
61. THE CHARACTERISITCS OF REALIZING: A) A FUNDAMENTAL BULLISH SITUATION. B) A RELUCTANCE BY SPECS TO BUY C) AN INVERSION OR SMALL CARRYING CHARGE BETWEEN CASH AND FUTURES D) BUSINESS INTERESTS ARE EITHER CAUTIOUS OR BULLISH.
62. ALWAYS REMEMBER THAT WHETHER MARKETS OR MERCURIAL, EXTREME IN PRICE FLUCTUATIONS, AND VERY DIFFICULT TO MASTER.FORECAST OF WEATHER ARE NOT RELIABLE.
63. ONE CANNOT DO ANYTHING ABOUT YESTERDAY. WHEN ONE DOOR CLOSES, ANOTHER DOOR OPENS. THE GREATER OPPORTUNITY NEARLY ALWAYS LIES THROUGH THE OPEN DOOR.
64. THE DEEPEST SECRET FOR THE TRADER IS TO SUBORDINATE HIS WILL TO THE WILL OF THE MARKET. THE MARKET IS TRUTH AS IT REFLECTS ALL FORCES THAT BEAR UPON IT. AS LONG AS HE RECOGNIZES THIS, HE IS SAFE. WHEN HE IGNORES IT, HE IS LOST.
65. SOMEWHERE A CHANGE IS OCCURING THAT CAN MAKE YOU RICH.
66. BEWARE OF " FOOLS DESEASE " . (I.E. WAITING FOR TRADES THAT YOUR SURE ARE 100% PROFITABLE.) IT IS BETTER NEVER TO LET YOURSELF BELIEVE THAT YOU ARE 100% SURE OF ANYTHING
67. ALWAYS GATHER THE FOLLOWING INFORMATION DAILY: DEFENSIVE INFO. 1) AVAILABLE CAPITAL. 2) MARGINS 3) GROSS POWER 4) NET POWER 5) CALCULATED RISK IN OPEN TRADES 6) PERCENT CAPITAL RISKED. OFFENSIVE INFO: 1) POTENTIAL PROFIT 2) POTENTIAL LOSS 3) MARGIN REQUIRED 4) PROFITS/LOSS RATIO 5) PROFIT/MARGIN RATIO 6) DEGREE OF CERTAINTY (TYPE OF TRADE)
68. A KNOWN FUNDAMENTAL IS A USEFUL FUNDAMENTAL.
69. MAJOR TRENDS ARE SELDOM BROKEN UNLESS THE MARKET GOES AGAINST THE TREND FOR THREE CONSECUTIVE DAYS.
70. IT'S MUCH FASTER TO PUT A TRADE ON THAN TO TAKE IT OFF.
71. IF A MARKET DOESN'T DO WHAT YOU THINK IT SHOULD --- AND YOU ARE TIRED OF WAITING--- YOU HAD BETTER BE OUT OF IT.
72. STAY CALM AND MAINTAIN CLEAR THINKING WHEN TRADING BIG POSITIONS.
73. RECOGNIZE WHETHER MARKETS ARE INHERENTLY MORE VOLATILE. THEREFORE, WIDEN OUT YOUR STOPS AND GIVE THE MARKET PLENTY OF ROOM TO MOVE SO IT DOESN'T TAKE YOU OUT PREMATURELY.
74. RE-EVALUATE YOUR POSITION IN THE MARKET IF CHARTS HAVE DETERIORATED AND FUNDAMENTALS HAVE NOT DEVELOPED AS YOU EXPECTED.
75. ABOVE ALL, BE MENTALLY PREPARED FOR THE RIGORS OF EACH TRADING DAY. -- -FROM THE TIME YOU GET UP EACH MORNING, (NOT LATE!!!) UNTIL YOU GO TO BED AT NIGHT.
76. DO WHATEVER IS NECESSARY TO STAY ON TOP OF THE MARKETS YOU ARE TRADING.
77. BELIEVE THAT THE MARKET IS STRONGER THAN YOU ARE. DO NOT TRY TO FIGHT THE MARKET.
78. BEWARE OF LARGE POSTIONS THAT CAN CONTROL YOUR EMOTIONS AND FEELINGS. IN OTHER WORDS DONT BE OVERLY AGGRESSIVE WITH THE MARKET. TREAT IT GENTLY BY ALLOWING YOUR EQUITY TO GROW STEADILY RATHER THAN IN BURSTS.
79. CAPITAL PRESERVATION IS JUST AS IMPORTANT AS CAPITAL APPRECIATION.
80. WHEN A MARKET HAS GOTTEN AWAY AND YOU'VE MISSED THE FIRST LEG, YOU SHOULD STILL CONSIDER JUMPING IN EVEN IF IT IS DANGEROUS AND DIFFICULT
81. WORK HARD AT UNDERSTANDING THE KEY FACTOR'S MOTIVATING THE MARKETS YOU ARE TRADING. IN OTHER WORDS, THE HARDER YOU WORK THE LUCKIER YOU WILL BE.
82. REMEMBER THAT IT IS BETTER TO TRADE A FEW BIG MOVES A YEAR (AND CLOSE THEM OUT PROFITABLY) THAN TO TRADE CONSTANTLY.
83. DO NOT ALLOW MINUTE-TO-MINUTE OR DAY-TO-DAY SWINGS CHANGE YOUR CONVICTION OF WHERE THE MARKET IS GOING.
84. SET AN OBJECTIVE FOR EACH TRADE YOU ENTER AND GET OUT WHEN YOU MEET IT. DONT BE GREEDY!
85. REMEMBER THAT FOR MANY COMMODITIES---POLITICS ARE MORE IMPORTANT THAN ECONOMICS.
86. NEVER ADD TO A LOSING POSITION.
87. BEWARE OF TRYING TO PICK TOPS OR BOTTOMS.
88. CLOSING HIGH ON FRIDAY--BUY! BIG ANNOUNCEMENTS OFTEN COME ON WEEKENDS. IF TREND DOESN'T CONTINUE ON MONDAY---GO OPPOSITE.
89. DAYTRADING IS AN EGO TRIP
90. WORRY ABOUT HOW MUCH YOU CAN LOSE. FIGURE RISK/REWARD RATIO AHEAD OF TRADE. STRIVE FOR AT LEAST THREE TIMES POTENTIAL PROFIT VERSUS LOSS.
91. IF IT APPEARS THAT LOTS OF BULLS ARE LONG---BE NERVOUS!
92. IF YOU HAVE A GOOD LEAD IN THE MARKET AND ALL THE NEWS SEEMS TOO GOOD TO BE TRUE YOU HAD BETTER TAKE PROFITS.
93. THE MARGINS CLERK IS YOUR BEST FRIEND
94. THE NEWS ALWAYS FOLLOWS THE MARKET.
95. YOU ALWAYS MAKE MONEY WHEN YOU ARE SURE BEFORE YOU BEGIN. PLAY THE MARKET ONLY WHEN PRECIDENTS FAVOR YOUR PLAYING IT. WHAT BEATS YOU IS NOT HAVING THE BRAINS TO STICK TO YOUR OWN GAME. THERE IS THE PLAIN FOOL WHO DOES THE WRONG THING AT ALL TIMES, BUT THERE IS THE COMMODITY FOOL WHO THINKS HE MUST TRADE ALL THE TIME.
96. THERE IS ONLY ONE SIDE TO THE MARKET; AND IT IS NOT THE BULL SIDE OR THE BEAR SIDE, BUT THE RIGHT SIDE.
97. A MAN MUST BELIEVE IN HIMSELF AND HIS JUDGEMENT IF HE EXPECTS TO MAKE A LIVING AT THIS GAME.
98. BEFORE YOU CAN SOLVE A PROBLEM YOU MUST STATE IT TO YOURSELF.
99. NEVER VOLUNTEER ADVICE AND NEVER BRAG ON YOUR WINNINGS
100. IT IS THE BIG SWING THAT MAKES THE BIG MONEY FOR YOU. " IT WAS NEVER MY WISHING THAT MADE THE BIG MONEY FOR ME. IT WAS ALWAYS MY SITTING TIGHT. " MEN WHO CAN BOTH BE RIGHT AND SIT TIGHT ARE UNCOMMON. THE MARKET DOES NOT BEAT THEM. THEY BEAT THEMSELVES, YOU MUST HAVE THE CURAGE OF YOUR CONVICTIONS AND INTELLIGENT PATIENCE TO SIT TIGHT. "
101. TO BUY ON A RISING MARKET IS A MOST COMFORTABLE WAY OF BUYING. BUYING ON A SCALE UP. SELL ON A SCALE DOWN.
102. COMMODITIES ARE NEVER TOO HIGH TO BEGIN BUYING OR TO LOW TO BEGIN SELLING. BUT AFTER THE INITIAL TRANSACTION, DONT MAKE A SECOND UNLESS THE FIRST SHOWS A PROFIT.
103. REALIZE THAT THE BIG MONEY COMES IN THE BIG SWING.WHATEVER MIGHT SEEM TO GIVE A BIG SWING, ITS INITIAL IMPULSE, THE FACT IS THAT NO MATTER WHO OPPOSES IT, THE SWING MUST INEVITABLY RUN AS FAR AND AS FAST AND AS LONG AS THE IMPELLING FORCES DETERMINE.
104. IN THE LONG RUN, COMMODITY PRICES ARE GOVERNED BUT BY ONE LAW--THE ECONOMIC LAW OF DEMAND AND SUPPLY.
105. IN A NARROW MARKET, THERE IS NO SENSE IN TRYING TO ANTICIPATE WHAT THE NEXT BIG MOVEMENT IS GOING TO BE--UP OR DOWN.
106. A LOSS NEVER BOTHERS ME AFTER I TAKE IT. I FORGET IT OVERNIGHT.BUT BEING WRONG AND NOT TAKING THE LOSS--THAT IS WHAT DOES THE DAMAGE TO THE POCKET BOOK AND TO THE SOUL.
107. IT IS PROFITABLE TO STUDY YOUR MISTAKES.
108. OF ALL SPECULATIVE BLUNDERS, THERE ARE FEW GREATER THAN SELLING WHAT SHOWS A PROFIT AND KEEPING WHAT SHOWS A LOSS.
109. A MAN MUST KNOW HIMSELF THOROUGHLY IF HE IS GOING TO MAKE A GOOD JOB OF TRADING. NO PRICE IS TOO HIGH FOR A SPECULATOR TO PAY TO LEARN THAT WHICH WILL KEEP HIM FROM GETTING THE " SWELLED HEAD " .
110. NOTHING IS NEW IN COMMODITIES! THE GAME DOES NOT CHANGE AND NEITHER DOES HUMAN NATURE.
111. IN A BEAR MARKET, IT IS ALWAYS WISE TO COVER IF COMPLETE DEMORALIZATION SUDDENLY DEVELOPS.
112. THE PRINCIPLES OF SUCCESSFUL COMMODITY SPECULATION IS BASED ON THE SUPPOSITION THAT PEOPLE WILL CONTINUE IN THE FUTURE TO MAKE THE MISTAKES THAT THEY HAVE MADE IN THE PAST.
113. IN A BULL MARKET AND PARTICULARLY IN BOOMS, THE PUBLIC AT FIRST MAKES MONEY WHICH IT LATER LOOSES SIMPLY BY OVERSTAYING THE BULL MARKET.
114. A BULL MARKET NEEDS TO BE FED EVERY DAY----A BEAR MARKET ONLY ONCE A WEEK.
115. STANDING ASIDE IS A POSITION.
116. NEVER FADE THE FED.
117. IF YOU DON'T KNOW WHERE YOU ARE IT IS IMPOSSIBLE TO KNOW WHERE YOU ARE GOING.
118. NEVER UNDERESTIMATE HOW MUCH TIME IS NECESSARY TO WASH OUT A MARKET THAT IS LONG.
119. NEVER BUY THE FIRST RALLY AND NEVER SELL THE FIRST BREAK.
120. BE ADVISED THAT IT IS BETTER TO BE MORE INTERESTED IN THE MARKET'S REACTION TO NEW INFORMATION THAT IN THE PIECE OF NEWS ITSELF.
121. DON'T DIVERSIFY--CONCENTRATE ON A FEW COMMODITIES. MORE DIVERSITY REDUCES AMOUNTS YOU CAN SPECULATE WITH. ALSO TOO MUCH TO WATCH.
122. DON'T EXPECT GOD TO PROTECT YOU WHEN TRADING COMMODITIES.
123. DON'T PIONEER HIGHS OR LOWS. LET THE MARKET TELL YOU A HIGH OR LOW HAS BEEN MADE.
124. KEEP SOME PERSPECTIVE. TREES DON'T GROW TO THE SKY. VALUES DON'T GO TO ZERO. WHAT ARE HISTORIES AND RECENT HIGHS AND LOWS? LOANS ARE NOT NECESSARILY PRICE FLOORS.CCC SELLING PRICES AREN'T NECESSARILY PRICE CEILINGS.
125. " IF YOU GET IN ON JONES' TIP; GET OUT OF JONES' TIP " . IF YOU ARE RIDING ANOTHER PERSON'S IDEA, RIDE IT ALL THE WAY.
126. DON'T CONFUSE ACTIVITY WITH ACCOMPLISHMENT.
127. RUN EARLY OR NOT AT ALL. DON'T BE AN ELEVEN O'CLOCK BULL OR A FIVE O'CLOCK BEAR.
128. AVOID SUDDEN COMPLETE MARKET REVERSALS. IF YOU DECIDE TO ABANDON EITHER THE LONG OR SHORT SIDE OF A MARKET. WAIT BEFORE TAKING THE OPPOSITE SIDE.
129. WOODROW WILSON SAID, " A GOVERNMENT'S FIRST PRIORITY IS TO ORGANIZE THE COMMON INTEREST AGAINST SPECIAL INTERESTS. " SUCCESSFUL TRADERS SEEK OUT MARKET OPPORTUNITIES CAPITALIZING ON THE REALITY THAT GOVERNMENT'S FIRST PRIORITY IS RARELY ACHIEVED.
130. AN ACCOUNT EXECUTIVE GREATEST ENEMY IS INERTIA - (I.E.THE TENDENCY TO REMAIN AT REST IF RESTING, OR IF MOVING, TO KEEP MOVING IN THE SAME DIRECTION.
131. " IF A MARKET MOVES SEVEN CONSECUTIVE DAYS IN ONE DIRECTION WATCH FOR SOME TYPE OF CORRECTION ON THE SEVENTH DAY " - W.D. GANN
132. PEOPLE WHO BUY HEADLINES EVENTUALLY END UP SELLING NEWSPAPERS.
133. IF YOU DO NOT KNOW WHO YOU ARE, THE MARKET IS AN EXPENSIVE PLACE TO FIND OUT.
134. SO GOES THE OATS- SO GOES THE FEED GRAIN MARKET.
135. TUESDAY UNDOES WHAT MONDAY DOES, AND IF TUESDAY DOESN'T WEDNESDAY WILL.
136. NEVER GIVE ADVICE--THE SMART DON'T NEED IT AND THE STUPID DON'T NEED IT.
137. PREPARING A LONG RANGE TRADING STRATEGY HELPS TO AVOID THAT " HERDING INSTINCT " THAT DECEIVES MANY INVESTORS INTO BELIEVING THAT THE MAJORTITY KNOWS BEST-- THEY RARELY DO. I HAVE YET TO SEE ANY STATUES DEDICATED TO A CROWD.
138. DISREGARD ALL PROGNOSTICATIONS. IN THE WORLD OF MONEY, WHICH IS A WORLD SHAPED BY HUMAN BEHAVIOR; NOBODY HAS THE FOGGIEST NOTION OF WHAT WILL HAPPEN IN THE FUTURE. MARK THAT WORD- NOBODY! THUS THE SUCCESSFUL, TRADER BASES NO MOVES ON WHAT SUPPOSEDLY WILL HAPPEN BUT REACTS INSTEAD TO WHAT DOES HAPPEN.
139. WORRY IS NOT A SICKNESS BUT A SIGN OF HEALTH. IF YOU ARE NOT WORRIED, YOU ARE NOT RISKING ENOUGH.
140. 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 PERSERVED GAINS YOU WOULD OTHERWISE HAVE LOST.
141. WHEN THE SHIP STARTS TO SINK, DON'T PLAY-- JUMP!
142. LIFE NEVER HAPPENS IN A STRAIGHT LINE. ANY ADULT KNOWS THIS. BUT WE CAN TOO EASILY BE HYPNOTIZED INTO FORGETTING IT WHEN CONTEMPLATING A CHART. BEWARE OF THE CHARTISTS ILLUSION.
143. NEVER GET ROOTED IN A TRADE BECAUSE OF THE FEELING THAT IT " OWES " YOU SOMETHING-- OR, JUSTAS BAD, THE FEELING THAT YOU " OWE " IT ENOUGH TIME TO SHOW WHAT IT CAN DO. IF IT ISNT GOING ANYWHERE AND YOU SEE SOMETHING BETTER, CHANGE TRAINS.
144. IF ASTROLOGY WORKED, ALL ASTROLOGERS WOULD BE RICH.
145. OPTIMISM MEANS EXPECTING, BUT CONFIDENCE MEANS KNOWING HOW YOU WILL HANDLE THE WORST. NEVER MAKE A MOVE IF YOU ARE MERELY OPTIMISTIC.
146. A HUNCH CAN BE TRUSTED IF IT CAN BE EXPLAINED. IN OTHER WORDS CONVERT YOUR HUNCH INTO A TRADE ONLY IF YOU CAN IDENTIFY WITHIN YOUR MIND A STORED BODY OF INFORMATION OUT OF WHICH THAT HUNCH MIGHT REASONABLY BE SUPPOSED TO HAVE ARISEN. IF YOU HAVE NO SUCH MENTAL LIBRARY OF DATA, DISREGARD THE HUNCH.
147. WHATEVER YOU DO, WHETHER YOU BET WITH THE HERD OR AGAINST, THINK IT THROUGH INDEPENDENTLY FIRST.
148. REPEATEDLY RE-EVALUATE YOUR OPEN POSITIONS. KEEP ASKING YOURSELF: WOULD I PUT MY MONEY INTO THIS IF IT WERE PRESENTED TO ME FOR THE FIRST TIME TODAY? IS THIS TRADE PROGRESSING TOWARD THE ENDING POSITION I ENVISIONED?
149. IT IS A SAFE BET THAT THE MONEY LOST BY (SHORT TERM) SPECULATION IS SMALL COMPARED WITH THE GIGANTIC SUMS LOST BY THOSE WHO LET THEIR INVESTMENTS " RIDE " . LONG TERM INVESTORS ARE THE BIGGEST GAMBLERS AS AFTER THEY MAKE A TRADE OFTENTIMES STAY WITH IT AND END UP LOSING IT ALL. THE INTELLIGENT TRADER WILL.... BY ACTING PROMPTLY --- HOLD LOSSES TO A MINIMUM.
150. WHAT WAS ONCE SUPPORT, NOW BECOMES RESISTANCE. THE REVERSE IS ALSO TRUE. WHAT WAS RESISTANCE NOW BECOMES SUPPORT.
151. 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.
152. IN BULL MARKETS SELL SIGNALS WILL NOT ALWAYS WORK, AND IN BEAR MARKETS BUY SIGNALS WILL NOT ALWAYS WORK.
153. VOLUME AND OPEN INTERES ARE AS IMPORTANT TO THE TECHNICIAN AS PRICE.
154. THE CLEAREST AND EASIEST WAY TO DETERMINE A TREND IS FROM PREVIOUS HIGHS AND LOWS. HIGHER HIGH AND HIGHER LOWS MARK AN UPTREND, LOWER HIGHS AND LOWER LOWS MARK A DOWNTREND.
155. GAPS NORMALLY SIGNAL THE CONTINUATION OF A MOVE.
156. ALTHOUGH GAPS ARE NOT ALWAYS, MORE OFTEN THAN NOT THEY ARE BEFORE THE MOVE CONTINUES.
157. THE NATION WITH TOO MUCH BREAD HAS MANY PROBLEMS: THE NATION WITH TOO MUCH LITTLE BREAD HAS ONLY ONE PROBLEM. BYZANTINE PROVERB (5TH CENTURY)
158. DON'T BUY A QUIET MARKET AFTER A RISE BECAUSE A LOW VOLUME RALLY IS ACTUALLY QUITE BEARISH.
159. DON'T SELL A QUIET MARKET AFTER A FALL BECAUSE A LOW VOLUME SELLOFF IS ACTUALLY A VERY BULLISH SITUATION.
160. LOSE YOUR OPINION--NOT YOU'RE MONEY.
161. WEALTH HASTILY GOTTEN WILL DWINDLE. BUT HE WHO GATHERS LITTLE BY LITTLE WILL INCREASE IT. --- PROVERB 13:11
162. PRICES ARE MADE IN THE MINDS OF MEN, NOT IN THE SOYBEAN FIELD. FEAR AND GREED CAN TEMPORARILY DRIVE PRICES FAR BEYOND THEIR SO-CALLED REAL VALUE.
163. A COMMODITY TRADER SHOULD CLEARLY UNDERSTAND AND ALWAYS REGARD HIS RISK OF RUIN. TRADERS WHO ATTEMPT A " CAREER SHOT " BY TAKING HUGE POSITIONS FOR IMMEDIATE PROFIT ARE PLAYING RUSSIAN ROULETTE WITH THEIR CAPITAL. ALWAYS BE ON GAURD FOR THE KILLER TRADE THAT CAN END YOUR CAREER AS A SPECULATOR--- IT CAN TURN YOU INTO A SPECULATOR INSTEAD.
164. IF IT'S OBVIOUS, IT'S WRONG.
165. IF A MARKET IS LIMIT DOWN TODAY, AND OPENS HIGHER TOMORROW, --DON'T BE SHORT.
166. TRADE DIVERGENCE BETWEEN RELATED COMMODITIES. FOR EXAMPLE, IF ALL GRAINS EXCEPT BEANS MOVE HIGHER BE READY TO SELL BEANS WHEN GRAINS APPEAR TO WEAKEN.
167. IF THE MARKET IS LIMIT DOWN TODAY, AND OPENS HIGHER TOMORROW, - DON'T BE SHORT.
168. WHEN THE MARKET BREAKS THROUGH A WEEKLY OR MONTHLY HIGH, IT IS A BUY SIGNAL. WHEN IT BREAKS THROUGH THE PREVIOUS WEEKLY OR MONTHLY LOW, IT IS A SELL SIGNAL.
169. TRADE THE DIVERGENCE FROM NORMAL. FOR EXAMPLE, IF TRADERS BELIEVE THE MARKET IS HEADED HIGHER AND THE RALLY FAILS, ITS USUALLY A GOOD SELL SIGNAL ESPECIALLY FOLLOWING GOVERNMENT REPORTS.
170. WHEN A MARKET MOVES LOWER, BUT BY SMALLER AMOUNT EACH DAY, IT MAY BE A SIGNAL FOR AN UPTREND. CONVERSE ALSO APPLIED.
171. EVERY SUNKEN SHIP HAS A CHART.
172. DON'T FORM NEW OPINIONS DURING TRADING HOURS. DECIDE UPON A BASIC COURSE OF ACTION, THEN DON'T LET INTRADAY UPS AND DOWNS UPSET YOUR GAME PLAN.
173. TAKE A TRADING BREAK. A BREAK WILL GIVE YOU A DETACHED VIEW OF THE MARKET AND A FRESH LOOK AT YOURSELF AND THE WAY YOU WANT TO TRADE FOR THE NEXT SEVERAL WEEKS.
174. ASSIMULATE INTO YOUR VERY BONES A SET OF TRADING RULES THAT WORKS FOR YOU.