What stock trading rules do you follow?

[jross]

 

I'll start... No context... just the rule description to start.

1. Do not get angry at your mistakes; learn from them.
2. Buy the company you believe in.
3. Do not beat yourself! Spectate on the market sentiment and sit tight with your selections. If it is a bull market, sit through the swings!
4. Give up trying to catch the first and last 1/8.
5. Always have sufficient knowledge to make an intelligent play.
6. Trust your instincts and play a lone hand based on your judgment of fundamental conditions and evidence.
7. If a stock does not act right, do not touch it!
8. Do not buy up stocks in advance of earnings.
9. Beware of stock limits.
10. Trade on the general market movement rather than an individual ticker movement
11. Test before going big. Average up, not down. Consider a pyramid trading strategy.
12. Buy at the line the first time a stock hits a new milestone (100, 200, 300).
13. Sell down until you can sleep at night.
14. Buy on value, not the price. A stock is never too high or too low.
15. Bad news is ignored in a Bull market. Good news is ignored in a bear market.
16. In a stock with narrow resistance, wait for the price to break in either direction.
17. There is only one side to the stock market, the right side!
18. Never trade to get even or to buy something in particular (car).
19. Do not buy on another’s tips.
20. You cannot win until you bet with your money
21. Buy the rumor, sell on the news.
22. Anticipate events 2-3 months ahead and sell when there is misinformation.
23. Every dog has its day. Stocks should move up with their sector.
24. Treat sectors differently. Technology can be bullish, while retail is bearish.
25. Let the stock test results change your mind from bull to bear or vice versa.
26. If a shorted stock does not recover, it probably deserves the low price.
27. Too much insider ownership can cause dead money.
28. Your enemies are ignorance, greed, fear, and hope.
29. A protracted decline is not a bear raid. Some is wrong with either the market or the stock.
30. You can beat a stock but not the market.

Many of those rules come from "Reminisces of a stock operator." I moved from index investment to individual stock trading around June 2020 and was making lots of mistakes due to panic and inexperience. I started writing down a few of my lessons. Later, I read that book in about two days... It was eye-opening.

[Wrestleknownothing]

Wow. That is a lot to digest.

I keep it simple. Get long and get loud. The vast majority of my investments are in index funds. My first job out of college was managing index funds and I never looked back. The book I was given to read at that time, and it still makes sense today, is Winning the Loser's Game.

As I pointed out to my children, if you had bought an S&P 500 Index fund, and reinvested dividends, with the worst possible timing in the past 35 years, February 19, 2020, you would now be +48.6% or +10.9% annualized.

As a matter of fact if you had done this on the five worst timed days in the past 35 years (2/19/20, 8/11/08, 3/19/02, 1/6/09, and 5/21/01) your investments would be +10.9%, +10.9%, +8.7%, +13.7%, and +7.9% annualized, respectively.

The point being that if you are a long term investor then it does not matter what price you buy at, it only matters that you buy.

 

[mspart]

buy high sell low.   That's the rule I mostly follow!

mspart

[jross]

Buying indexes and leaving them alone is a fine strategy.

 

[mspart]

That's what they say,  Dollar cost averaging.   Keep putting it in and let it grow.  

mspart