1. Zig When Others Zag
Sell hope and buy despair and take the other side of emotional disconnects (in the context of controlled risk). If you can’t find the sheep in a herd - it’s probably you.
2. Respect Price Action but Never Defer to it
Observation is a valuable skill set - never get bullied into a position.
3. Opportunities are made up easier than losses
You don’t have to play everyday ... often times the ability to sit it out pays better than playing.
4. Emotion is the enemy of trading
Markets don’t reward emotion - they punish it.
5. Adapt your style to the market
Different investment approaches are mandatory at different market junctures. Sync your time horizon with your risk profile.
6. Discipline trumps conviction
Never ‘believe’ you're smarter than the market, and stay unattached to every position.
7. Maximize your reward relative to your risk
Picking your spots requires patience.
8. Perception is reality in the marketplace
Understanding the crowd’s dominant feelings is imperative to sizing up risk / opportunity. Perception is reality in the markets.
9. When unsure
Sit it out - your risk profile must always be an extension of your thought process.
10. Never let bad trades turn into investments
Rationalization has NO place in trading.