Information Blog on Everything

Saturday, October 18, 2008

6 Philosophy of trading stocks

1. Never buy or sell stocks without checking the chart.

2. Never buy stocks when good news come out, especially if the chart shows a significant advance prior to the news release.

3. Never buy stocks because it appears cheap after getting smashed. When it sells off further, you'll find out that cheap can become far cheaper!

4. Never buy stocks in a downtrend on the chart.

5. Never hold stocks that is in a downtrend no matter how low the price/earnings ration. Many weeks later and several points lower, you'll find out why the stock was going down.

6. Always be consistent. If you find that you're sometimes buying, sometimes selling in practically identical situations, then there is something terribly wrong with your discipline.