50 rules millionaires use to trade stocks. 50 rules millionaires use to trade stock cut losses...
TRANSCRIPT
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50 Rules Millionaires Use to Trade Stocks
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50 Rules Millionaires Use to Trade Stock
Cut losses short; Let profits run. Sell an 8-12% loser. This is the “golden rule” of
investing
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50 Rules Millionaires Use to Trade Stock
Create a trading plan. Test your plan. Then, stick to it.
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50 Rules Millionaires Use to Trade Stock
The trend is your friend. Buy in an up-trending market. Use the 100-day moving average as
your guide
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50 Rules Millionaires Use to Trade Stock
Good management creates value. Buy companies with good
leadership and management Scout out their track record.
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50 Rules Millionaires Use to Trade Stock
Invest in No. 1. Buy companies that dominate their
sector. Why mess with second best? Your money is at stake.
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50 Rules Millionaires Use to Trade Stock
Money flows to new ideas. Buy companies that have a track
record for new innovations. Understand the story and make
sure you like the ideas driving the company.
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50 Rules Millionaires Use to Trade Stock
Buy companies with 20% revenue growth.
Investment life is too short to wait for sleepers that can’t grow 20% or more per year
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50 Rules Millionaires Use to Trade Stock
Current earnings that reduce your risk.
Buy companies with earnings growth of 20% a year or more.
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50 Rules Millionaires Use to Trade Stock
Annual earnings are a huge clue. Buy companies with annual
earnings growth of 25 to 50%.
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50 Rules Millionaires Use to Trade Stock
Sell a technical breakout.
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50 Rules Millionaires Use to Trade Stock
Sell double or triple tops. They are powerful indicators
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50 Rules Millionaires Use to Trade Stock
Buy stocks that go against bear trends.
Buy stocks that rally even when the market is falling.
That’s usually a clue to a significant shift in attitude toward that company
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50 Rules Millionaires Use to Trade Stock
Make the market come to you. Enter with buy stops $1 over the
market
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50 Rules Millionaires Use to Trade Stock
Don’t be a bottom picker. But, if you occasionally break this
rule, use close stop loss orders
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50 Rules Millionaires Use to Trade Stock
Safe harbor your profits. Don’t expose all of your profits to
the market. Buy real estate or some liquid
asset with part of your profit.
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50 Rules Millionaires Use to Trade Stock
Add to winners, not your losers. Double down is double trouble
unless you have very deep pockets.
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50 Rules Millionaires Use to Trade Stock
Don’t over-trade. Know when to step back and let
the market do your work
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50 Rules Millionaires Use to Trade Stock
Take a few big risks. Put 5% of your risk capital on wild
possibilities. But don’t “bet the farm” on those
long shots.
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50 Rules Millionaires Use to Trade Stock
Eat from a “Silver Spoon”. It is technical formation which
throws off good buy signals .
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50 Rules Millionaires Use to Trade Stock
Know yourself. Know your ability and propensity
for risk Trade within those limits.
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50 Rules Millionaires Use to Trade Stock
Learn to accept losses. Don’t cry over spilled milk Forget yesterday’s losers. Every day is a new beginning, a
fresh start.
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50 Rules Millionaires Use to Trade Stock
Don’t put all your eggs in one basket.
Own 25 stocks over 5 sectors Spread your risk
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50 Rules Millionaires Use to Trade Stock
Invest heavily in one or two winners.
Sounds conflicting to previous rule. Sometimes rules are in conflict
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50 Rules Millionaires Use to Trade Stock
Write covered calls. They enhance your income. Ask your broker to explain. If he can’t, get a new one.
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50 Rules Millionaires Use to Trade Stock
Take a trading break. The more you trade, the more you
need complete breaks to clear your mind..
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50 Rules Millionaires Use to Trade Stock
Seek wise counsel. Then get a second opinion.
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50 Rules Millionaires Use to Trade Stock
Stay liquid. Avoid big positions in low volume markets.
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50 Rules Millionaires Use to Trade Stock
Buy the rumor, sell the fact. By the time an idea hits the major
media, chances are, the market has already discounted the information.
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50 Rules Millionaires Use to Trade Stock
Keep one eye on gold. Gold price measures the world’s
fear factor. The higher the price, the higher the
fear.
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50 Rules Millionaires Use to Trade Stock
Keep positive company. Positive people impact your
attitude and attitude affects your confidence.
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50 Rules Millionaires Use to Trade Stock
Don’t be a pig. Bulls make a little, bears make a
little, and pigs get slaughtered.
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50 Rules Millionaires Use to Trade Stock
Go with your gut. Sometimes. Not all the time.
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50 Rules Millionaires Use to Trade Stock
Buy what you believe in. If you find a piece of software you
like, check out the company behind it.
Watch what your own family and friends are buying.
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50 Rules Millionaires Use to Trade Stock
Buy big, add small. Build a trading pyramid by laying
the base investment, then making incrementally smaller additions as the market moves in your favor.
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50 Rules Millionaires Use to Trade Stock
Allow only the “fittest” stocks to survive.
Sell the weakest stocks in your portfolio, even if they are winners.
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50 Rules Millionaires Use to Trade Stock
Hold a few favorites for years. Try to avoid a short-term mindset
on more than 20% of your portfolios
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50 Rules Millionaires Use to Trade Stock
Know when to hold and when to fold.
When you don’t get what you expect, move on to another stock
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50 Rules Millionaires Use to Trade Stock
Milk the media. Get good ideas from smart people. Some of the smartest people spill
their best research in public
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50 Rules Millionaires Use to Trade Stock
Use “trailing stops” to Jock in profits.
But use fixed stops to get out of losers.
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50 Rules Millionaires Use to Trade Stock
Hire an expert. Compare your investment results
with “hired management”
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50 Rules Millionaires Use to Trade Stock
Know the world’s power “waves.” A few huge trends drive corporate
growth
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50 Rules Millionaires Use to Trade Stock
Watch the volume signals. Volume surges are a warning of an
impending change.
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50 Rules Millionaires Use to Trade Stock
Invest gains in good causes. The hope of our grandchildren
rests in our investment in causes which create positive cultural change.
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50 Rules Millionaires Use to Trade Stock
Avoid buying on margin. High leverage is high risk When you are wrong, margin
buying magnifies your error.
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50 Rules Millionaires Use to Trade Stock
Buy stocks institutions buy. Read the financial data to see
which institutions are adding your favorite stock to their portfolios.
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50 Rules Millionaires Use to Trade Stock
Buy stocks in tight supply. If you are considering two stocks,
one with 20 million shares outstanding, the other with 100 million, choose the smaller one
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50 Rules Millionaires Use to Trade Stock
Never let a winner become a loser. Use stop loss orders to protect your
gains.
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50 Rules Millionaires Use to Trade Stock
Be patient. Major price moves need time to
run.
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50 Rules Millionaires Use to Trade Stock
Buy stocks with 85% relative strength.
Relative strength measures a stock’s price performance with all other stocks.
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50 Rules Millionaires Use to Trade Stock
Don’t be penny-wise and pound-foolish.
When you decide to enter the market, avoid the temptation to put a price order in to get it just a bit cheaper.