15 Essential Principles for Successful Trading and Investing
Stockscores Foundation for the week ending May 19, 2025
In this week's issue:
In This Week’s Issue:
- Market Outlook – A Risky Market?
- This Week’s Market Minutes video – Why Some Stocks DOUBLE in a Day (and how to find them)
- Trader Training – 15 Essential Principles for Successful Trading and Investing
- Strategy – Alpha Stocks
Market Outlook – A Risky Market?
Stocks have been drifting higher over the past few weeks as the trade war fear has dissipated. However, the market is still nervous and susceptible to negative headline risk. This makes it important to manage risk with loss limits and focus more on Alpha stocks which will move independent of the overall market. These are characterized by abnormal price and volume activity.
This Week’s Market Minutes Video – Why Some Stocks DOUBLE in a Day (and how to find them)
Every day, every week, there are stocks that more than double. Why does this happen and how can you find them? This week, I show what to look for when searching for the stocks that can make big gains in a short amount of time. Then, I provide my regular analysis of the stock, commodity, currency and bond markets. Finally, a look at the trade of the week on TAOP.
CLICK HERE TO WATCH THIS WEEK'S VIDEO
https://youtu.be/RjWB8UQIz9Y
Commentary – 15 Essential Principles for Successful Trading and Investing
Follow the Action
Focus on stocks that stand out with unusual price and volume activity—these are often the ones that outperform the market and deliver the best returns.
Trade with the Trend
Align your trades with the broader market direction. Go long in uptrends and short in downtrends. Pay special attention to the sectors that are leading either way.
Be Patient with Winners
Don’t sell a winning position just because it feels good or hits an arbitrary target. Let profits run until the trend shows signs of reversing.
Cut Losers Quickly
Losses are inevitable. Your success depends on how you manage them. Define your exit point before entering a trade, and stick to it if the market proves you wrong.
Put in the Work
Trading is simple in concept, but difficult in execution. Study, practice, and backtest your strategies. Continuously refine your skills.
Stay Detached
The more emotionally invested you are in a stock, the more likely you are to overlook warning signs. Treat stocks as tradeable symbols, not personal convictions.
Respect Your Risk Tolerance
Emotional mistakes stem from taking on more risk than you can handle. Trade within your comfort zone to maintain discipline and objectivity.
Accept Being Wrong
You don’t have to be right all the time to be successful. What matters is making more on your winners than you lose on your losers. Respect the market’s message.
The Market Isn’t Fair
Not all traders have access to the same information. You’ll either need better insights—or follow the smart money that does.
Perfection Isn’t the Goal
Mistakes happen. You’ll miss trades, enter too early or too late. Focus on overall improvement, not perfection.
Less Can Be More
Avoid mediocre setups. Patience pays. Great traders wait for high-probability trades and aren’t afraid to stay on the sidelines when conditions aren’t right.
Markets Can Defy Logic
Often, price moves don’t make sense in the moment. Don’t try to rationalize everything—the market is driven by data you may not have access to.
Don’t Gamble
Successful trading is based on tested strategies and statistical edge. Gamblers operate on hope. Know the difference.
Never Average Down a Loser
Adding to a losing position compounds your error. If a trade isn’t working, accept the loss and move on.
Add to Your Winners Wisely
When a trade is working, consider increasing your position—but only within your risk limits. Use gains from earlier entries to offset the added risk.
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Strategy of the Week - Alpha Stocks
From my Market Scans today, two Alpha stocks that traded abnormally with strong liquidity and are worth considering for swing trades
1. TNGXStrong price break today with very good volume, watch this one for a break of a pullback after the big gains today to improve the probability and reward for risk potential. Needs to hold above $1.20.
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2. LAESLAES was very strong in December but then went quiet for most of 2025. It is starting to move up with volume again and looks like it has good potential as long as it can hold above $2.20 support.
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