MY FEW SIMPLE RULES
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See the difference between Price and Value. Must able to decide whether a stock is priced above or below our estimate of its value.
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Always start with the longest-term picture we can get i.e. 20-year, 5-year. Starting our analysis with as much history as we can. This gives us more perspective.
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The Other Traders. Find out why someone would sell the stock to us. Pros / Cons list.
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PATIENCE IS TO
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WATCH stock trade for few days to get a FEEL. Understand WHERE the particular share price is with regard to its current TREND. Where has Price been? Where is it likely to go?
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Let the market STOP going down. Let the stocks HOLD Higher and only then Load Up. LOW VOLUME ON THE PULLBACK, HIGH VOLUME AS THE STOCK ADVANCE HIGHER
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DISCIPLINE IS TO
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Always trade IN THE DIRECTION of the MAJOR TREND
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Do Not be the FIRST to buy
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Only take a trade if RISK/REWARD is at least 1:3. Set Protective Stop, Entry Point and Apply EW + Fibonacci to calculate probable Target Price.
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Always UNDER-TRADE! PROBING small position first
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WHEN I AM WRONG. I GET OUT OF MY POSITION!! NO IFs, ANDs, BUTs, or MAYBEs about it
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COURAGE IS TO
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Buy High and Sell Higher. Don't afraid to join later in a strong trend.
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