More Rules of Trading - in Regards to Rule # 6

  1. Never fight public sentiment  - If everything you know about a stock says it will go higher, i.e. technicals, news, etc and it keeps going lower, don't fight it.  Get out!

  2. If a stock company has any major litigation, stay away till the dust settles.  Many companies will have lawsuits, even daily, part of doing business so don't worry about the small stuff.  Stay away from the major law suits, patent infringement, huge class action lawsuits, etc.

  3. Splits can be good, stay away from reverse splits.

  4. Love the company, never the stock - You can always love a company, its owner, it's CEO, it's practices!  Never, not ever, love the stock, never trust it!  The stock is ruled by other people that are trying to make money off the stock just like you.  A company can be stable, the stock can be fickle! Every stock has it's haters and lovers. Bears love to drive the stock to zero, Bulls see the sky as the limit.  Know them both, and keep them close to you!  Understand both sides, and make informed decisions.

  5. Never trade on emotion - impulse buying has ruined many a good man/woman.  Know your stock before buying!  Know your stock before trading!

  6. Know the fundamentals!

  7. Know the charts!

  8. Entry points matter!
    The most dangerous time of ownership is when you purchase. 
    If the stock price goes up you get a cushion, if not you are immediately presented with a loss. Time the buy!

  9. Never buy on somebody's recommendation, not even mine here!  A recommendation is just that.  Research why it's so great, and why it's not!  I've never found a perfect company yet, there is always a negative.  If it's really that good, it is already probably a $1,000 per share price!  Could you just buy all stocks over a thousand and be good?  Good question, never done it.

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