Many people asked me to re:post this because it got erased. So here it is, with more to come.
Hello all, I hope everyone is trading to the best of your abilities. So I’m a grandpa by many standards, perhaps a grandson to Buffet, wishful thinking, but aged like an unfine wine. So listen up and listen up good or semi-good. I see a lot of people here and on other subs, asking similar questions, looking for help, asking my advice, direction. Many are new which is great, great for the markets and great for seasoned investors. So I wanted to offer up some of my investing / trading rules and thoughts.
RULE #1: You will never outsmart the markets so don’t even try. To me, this means a lot. It means, don’t try and time a bottom or top for that matter. Don’t try to catch a falling knife. Be humble and grateful. We are all pawns in this game, even the big boys, remember that. Look at Icans recent sells, Buffets Airline sales, Drunkenmiller, one of the best known traders, saying that he was way to pessimistic and missed the entire recent rally. So Rule #1, you are not smarter than the market, not even close. The markets will at times, eat you alive and spit you out! Think Robert Shaw in Jaws. Therefore, take your gains when you see fit. You never go “broke” taking a profit. Repeat that to yourself like a Mantra! Also, you Don’t need to anguish over some sales you made to early, there is always a new day. The best thing you can do for yourself is be in the game! Always be in the game, but take your profits. Tomorrow is a new day!
Rule #2. Study, listen and learn. Always be learning. Just like Baldwin’s ABCs of selling, Another great movie! ABL. Always Be Learning. Read books, follow some successful experienced traders, listen to business news. Bloomberg, CNBC, Barrons, CNBC International, and others. By the way, there is some really good information and advice on these subs. Take notes on what you heard, but ask questions. Believe me, you will become smarter, sound smarter and feel like a more powerful trader. I’ve been trading for over 20 years and I’m still learning, growing and perfecting my craft. So don’t be afraid to ask.
Rule #3. Create an investing / trading goal. Know what you are investing for and feel confident about it. If you have a family, great. Learn about 529 plans and joint account / UTMAs for your children. Know the tax rules. If investing for yourself, decide which investment vehicle is the best for you. Individual account, IRA, SEP, ROTH. Know the benefits and limitations of each. Really understand what your risk parameters are. Are you Risk averse, or are you a risk taker. Where is your comfort zone? Are you willing to Lose 30% for a chance to make 70%. Most likely, overtime you will figure out your comfort zone and Invest accordingly. If you want to make 10% per year, diversify and invest accordingly. If you want to try for 20%, invest appropriately and understand you need to invest in higher beta names.
Rule #4. Quell your FOMO. No FOMO!! FOMO is the killer and opposite strategy of good sound investing. Do not chase, don’t get suckered in. And If you do, have an exit strategy. Always remember what you are investing for or trading for. If you are trading GNUS or NKLA or even AAL know the risks!! Have a game plan to get out. - More on trading strategies to come- once you feel you are missing out, stop and reflect. Take a moment and at least know what and why you are investing. Ask yourself, What is the purpose of this trade? The more you listen to that insane chatter on Wall Street Baboons and Twitter, lol, the more you are sucked in. It’s ok, but learn how to trade correctly. Remember to always know why you are placing that trade. Also please do your own research, Read up like a son of a bitch. If you must chase your own FOMO, then do it with 2-5% of your total portfolio. Set rules for yourself and stick to them.
Rule #5. Write down all your trades. Keep good notes. Write down why did you do these trades. Why are you buying F, GE, HTZ, AAPL. I think You will see a difference in the reasons. Most important of this rule, Highlight your losses. Focus on them. Learn from them. I believe that your losses are more important than your winning trades. From these, you can become a better more finely tuned trader. Remember, the whole idea of trading is this:
winning trades outweighs losing trades. I’m now able to trim my losses and press my gains much better now. Go over your trades once a week. Highlight the losses and enjoy the gains, but learn from the losses!
Rule #6. And these are in no order. Have faith in yourself. Trust your judgements. Believe in yourself! If you are a new trader / investor have faith that you will learn and grow. Read up and try and learn what you can from more seasoned successful traders. Don’t listen to that youtuber discussing how they made $30k from BABA options. Most did some YOLO trades and decided to talk and highlight their one winner and conveniently not discuss the ten other losers. Don’t just blindly believe everyone and everything you see and hear! Do you own research!! Take the time. I remember when Netflix was trading around 60, 8 years ago. I researched that company and gathered as much info as I could. Earnings reports, tech analysis, top executives, movies and shows on the platform. Upcoming shows. I’m still long that stock and don’t forget the 7-1 split. So please, if you are on here, that tells me you want to learn. So Take the time to research. All the info is right there!
For the short term investors, today was an insanely painful day. A day to reflect and remember that we are mere mortals to the market. The market ultimately decides if it allows us to make some money. The markets today, trade so much faster and harsher than the days of old. Interesting though, that the major averages traded near to the recent ceiling “resistance” levels on all the major averages. Normally a move like this would take weeks, not hours.
For the long term investors, this is providing potentially a great opportunity. We always want better entry points into the right stocks. Remember that, the market provides Opportunities to get in, be grateful. But be grateful in the right sectors and the strong stocks. -trading ideas in my next post-
I probably have around 30 more rules. Ha. Next time I get around to posting I’ll discuss proper ways to trade and invest. And for those who read all the way down here, every year I learn and grow. My trading account is up over 2000% in the past 10 months. I trade stocks, Options and covered calls. I really want everyone to learn and grow! Be confident in your trades and take profits! Try and limit your losing trades and use your investment capital wisely. Ask questions if you like. Best of luck!
Submitted June 11, 2020 at 08:00PM by zdonkeyspeaks https://ift.tt/3dUEXd1
