10 Important Principles for Successful Stock Trading
Stockscores Foundation for the week ending September 28, 2026
In this week's issue:
In This Week’s Issue:
- Market Outlook – Tech Divergence
- This Week’s Market Minutes video – These Stocks Leading the Market as Stock Season Begins
- Trader Training – 10 Important Principles for Successful Stock Trading
- Strategy – Stockscores Simple
Market Outlook – Tech Divergence
While elevated interest rates hinder small company stocks from doing well, technology stocks broke a pullback and appear likely to continue their long term upward trend. This strong showing last week likely due to a warming of relations between the US and China which has an outsized benefit for tech stocks, particularly the Semiconductors.
Historically, September is the worth performing month of the year for stocks with strength typically starting in October and running until May. Now is the time to start looking for opportunities but be patient and don’t try too hard yet.
This Week’s Market Minutes Video – These Stocks Leading the Market as Stock Season Begins
One section of the market made some good gains last week while many other stocks lag. I explain the reason for the divergence and what to watch for over the weeks ahead as we go into the traditionally strong time of the year for stocks.
CLICK HERE TO WATCH ON YOUTUBE
https://youtu.be/Pg8RHj0xK74
Commentary – 10 Important Principles for Successful Stock Trading
After nearly four decades of trading stocks, I have learned that success in the market does not come from predicting the future. It comes from developing an edge, managing risk, and consistently following a process. Markets change, strategies evolve, and technology improves, but the principles behind successful trading remain remarkably consistent.
Here are the ten principles I believe matter most.
1. Price movement matters more than opinion.
The market does not care what you think a stock should do. A great company can be a terrible stock, and a questionable company can produce an excellent trade. Instead of trying to prove that you are right, let the behavior of price tell you what investors are actually doing.
2. Supply and demand determine price.
Every price move ultimately comes down to buyers competing with sellers. When demand overwhelms supply, stocks rise. When supply overwhelms demand, they fall. Learning to recognize abnormal shifts in supply and demand is at the heart of finding opportunity.
3. Trade stocks that are doing something abnormal.
Opportunity usually appears when a stock behaves differently than it normally does. Unusual price movement, abnormal volume, volatility expansion, or a sudden break from an established pattern can signal that informed or highly motivated traders are entering the market.
4. Follow strength rather than searching for bargains.
Stocks making strong upward moves often continue to outperform because strength attracts capital. Buying weakness simply because a stock appears cheap can leave you trapped in a declining trend. Leadership matters.
5. Wait for the market to confirm your idea.
You do not get paid for anticipating a move; you get paid when the move actually happens. Rather than buying because something might occur, wait for price action to demonstrate that buyers have taken control.
6. Define your risk before entering the trade.
Every trade should have a price where you know your thesis is wrong. That price determines your risk and, therefore, your position size. Risk should never be something you figure out after entering the trade.
7. Keep losses small.
Losses are unavoidable, but large losses are optional. One of the biggest differences between successful and unsuccessful traders is the willingness to quickly admit when a trade is not working. Small losses are simply the cost of doing business.
8. Let profitable trades pay for the losers.
You do not need to be right most of the time if your profitable trades are significantly larger than your losing trades. Good trading is not about maximizing your percentage of winning trades; it is about maximizing the expected value of the decisions you make.
9. Control emotion by following rules.
Fear, greed, hope, frustration, and regret cause traders to abandon good strategies at exactly the wrong time. The solution is not to eliminate emotion—it is to develop clear rules so that emotion has less influence over your decisions.
10. Consistency beats brilliance.
A trader does not need to make spectacular trades to succeed. What matters is applying a positive-expectancy strategy repeatedly while controlling risk. There will always be another opportunity. The goal is to remain disciplined and preserve your capital so you are able to take it.
Trading success is ultimately less about finding the perfect stock and more about consistently making good decisions. Find situations where the odds are in your favor, wait for the market to confirm the opportunity, risk a manageable amount, and get out quickly when the market proves you wrong.
Do those things consistently, and the mathematics of a good trading strategy can do the rest.
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The Stockscores Simple Market Scan seeks stocks with a Sentiment Stockscore of at least 60 and a Signal Stockscore of 80. I ran this on the US and Canada today and inspected the charts. Here are two to consider:
1. AMCAMC is breaking out of an ascending triangle pattern on the daily chart and getting through resistance at $3. The sector is improving and this one is worth considering provided support at $2.40 holds up.
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2. QMCOQMCO has been building upward momentum over the past few months and is again breaking to new highs for 2026 this past week after a 5 week pause. Support at $22.
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