These Are My Core Trading Principles
In This Week’s Issue:
- Free webinars start this Saturday!
- Stockscores Market Minutes Video – Why You Should Love a Stock Market Crash
- Stockscores Trader Training – Core Trading Principles
- Stockscores Market Scan – Abnormal Up US
Stockscores Webinars in October
Join me for any or all of the webinars coming up in October. Each of these are about an hour long and a free way to learn some of my methods for investing and day trading the stock market.
THE 3 THINGS YOU MUST DO TO MAKE MONEY IN THE STOCK MARKET
Saturday, October 16, 10:15 AM PT
HOW TO INVEST IN THE STOCK MARKET PROFITABLY
Tuesday, October 19, 6PM PT
THE THINGS YOU MUST DO TO BE A SUCCESSFUL DAY TRADER
Wednesday, October 20, 6PM PT
HOW STOCKSCORES TRADER TRAINING CAN HELP YOU MAKE STOCK MARKET PROFITS
Saturday, October 23, 10:00 AM PT
CLICK HERE to Register for any of these free webinars
Stockscores Market Minutes – Why You Should Love a Stock Market Crash
People fear stock market crashes but they provide some of the most profitable trading opportunities for those who are fearless. This week, I show you what to look for, provide my weekly analysis of the markets, the day trade of the week on UP and a Market Scan in search of good trading opportunities.
CLICK HERE to watch this week's Market Minutes video
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Commentary of the Week – Core Trading Principles
Here are 15 Core Trading Principles that every trader should understand and respect:
Follow the Action
Stocks that beat the market and provide the best profits trade with abnormal price and volume activity. Focus on these stocks.
Don’t Fight the Trend
More than ever, trading in the direction of the overall market trend will have a major effect on your performance. Short when the market is moving lower, buy when the market is moving up. Focus on the sectors of the market that are leading in either direction.
Be Patient with Winners
Avoid selling winners because it feels good to do so or because they have hit your price target. Never limit upside, just sell when the upward trend is broken.
Have No Patience with Losers
Being wrong is part of trading. What you do with your losers will determine your trading skill. For every trade that you take, know the price level where the market will prove you wrong and get out when it hits that price.
Do the Work
Trading is simple, but it is not easy. Take the time to learn and gather experience. Compile data to prove the worth of your trading strategies and never stop evolving your trading skills.
Don’t Fall in Love
The more you know about a company, the greater the risk that you will fall in love with it and ignore the negative signals that the market gives you. Treat every stock as a symbol that you are just as willing to sell as you are to buy. Keep your emotions out of it.
Respect Your Tolerance for Risk
We make emotional trading mistakes because we are afraid of losing money. If we take a risk level we are comfortable with, there is less chance we will get emotional.
Don’t Expect to Always be Right
You don’t make money in the market by being right, you succeed by making more when you are right than you lose when you are wrong. When the market tells you are wrong, believe it.
The Stock Market is Not Fair
Most investors are trading on information that is publicly available. Some investors are trading on better information that is not widely known. To be successful, you either have to have better information or follow those who do.
Don’t Aim for Perfection
All traders make mistakes, miss good opportunities and take questionable ones. Don’t get frustrated by the inevitable errors. Put your focus on being as good as you can be.
You Can Make More by Trading Less
Take the best trading opportunities, not the marginal ones. Bad traders act on their fear of missing out. Good traders sacrifice catching every winner in favor of maximizing their overall profitability. There is nothing wrong with doing nothing when conditions are not good for trading.
The Market Will Do Things That Don’t Make Sense
A market’s move is rarely explainable until after the move happens because the market trades on information that most traders don’t have. Don’t doubt the market’s movements, you probably don’t have all the facts.
Good traders have a strategy that they have tested over a large sample of trades to understand the probability and profitability of success. Gamblers trade against the odds because they don’t know what they are.
Never Buy More of a Loser
If your analysis of a stock is correct, the trade will show a profit. If it is losing then you have only been proven wrong. Don’t make being wrong worse by adding to the position.
Add to Your Winners
When you are right, add to the position as long as you are not adding on more risk than you are comfortable with. The risk of your added positions should be mitigated by the profits from the earlier entries.