Trading Lesson of the Week

Check back weekly for another free trading lesson:

15 Principles to Guide Your Trading

In This Week’s Issue:

  • Webinar Videos
  • Market Outlook – Momentum Turning
  • This Week’s Market Minutes video
  • What’s Working Now – Day, swing and maybe position trades
  • Trader Training – 15 Principles to Guide Your Trading


Upcoming Events

Learn how to be a better investor and trader with free Stockscores webinars. Video links on YouTube below:





Market Outlook

Stocks recently broke a medium term downward trend line, a positive move that shows optimism is slowly returning to stocks. The longer term trend remains down so aggressive buying is not yet appropriate. However, we are seeing opportunities in some sectors that are leading the turn. Mid term elections in the US may be a catalyst for optimism but watch for a build or rising bottoms on the index charts to confirm.



These stocks have come down a long way this year, is it time to buy them? This week, I show how to analyze them in 10 seconds, whether you are a long-term investor or a short-term day trader. Then I analyze the overall markets and look at the day trade of the week on TSLA.

Click here to watch

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What’s Working Now

Day trading delivers a few trading opportunities each day but gains are smaller, making it a market to take consistent small profits rather than swing for home runs. Conditions are improving and that is helping swing trades start to show up as opportunities. Some sectors are catching buyer interest but we are early in the trend so the momentum is building slowly. Watch Airlines, Cruiselines, Energy, Precious Metals and Mining.


Trader Training – 15 Principles to Guide Your Trading

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.

Gamblers Lose

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.


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