O.T.
I'm ordering the book. Very interesting.
That book was out of print for a while. If you are interested in 'Jesse's Maxims', here is a list of some, as well as others from other sources. <g>
Its good to remember some of these ounce in a while. :>)
1. WARREN BUFFET'S RULE #1: DON'T LOOSE ANY MONEY
2. HIS RULE #2: DON'T FORGET RULE #1
3.TO BUY ON A RISING MARKET IS THE MOST COMFORTABLE WAY OF BUYING STOCKS.
4. Nobody can give me a tip or a series of tips that can make more money for me than my own judgment.
5. Stocks are never too high for you to begin buying or too low to begin selling.But after the initial transaction, don't make a second one unless the first one shows you a profit. DON'T AVERAGE DOWN.
6.A loss never bothers me after I take it. I usually forget overnight. But being wrong---not taking the loss---that is what does the damage to the pocket book and to the soul.
7. Of all speculative blunders there are few greater than trying to average a loosing game. Always sell what shows you a loss and keep what shows you a profit.
8. If all I have is ten dollars and I risk it, I am much braver than when I risk a million and have another million salted-away. ( But it is usually not wise to risk more than 2% of your trading capital in any transaction.)
9. The desire for constant action irrespective of underlying conditions is responsible for many losses.
10. There is only one side to the stock market, and it is not the bull side or the bear side, but THE RIGHT SIDE.
11. It doesn't pay a man to be wrong.
12. It isn't good to advance until you are sure that you won't have to retreat.
13. If a stock doesn't act right, don't touch it.No diagnosis, no prognosis.No prognosis, no profit.
14. The semi-sucker is the type that thinks he has cut his wisdom teeth because he loves to buy on declines.
15. One of the most helpful things that any body can learn is to give up trying to catch the first eighth --- or the last ---. Those are the most expensive eighths in the world.
16. In a trending market is better to sit aside and wait until the line of less resistance defines itself.
17. It is always better to think of basic conditions instead of individual stocks.
18. In a bull market your game is to buy and hold until you believe that the bull market is near an end. Remember is the BIG SWING that makes the BIG MONEY for you. .
19. Without faith in his own judgment no man can go very far in this game.
20. It is usually not good to buy stocks too cheap or too easily. To buy on a rising market is the most comfortable way of buying.Buy on a rising scale, not on a scale down.
21. THE NEED ABOVE ALL OTHER THINGS IS TO DETERMINE THE KIND OF MARKET A MAN IS TRADING IN
22. It sounds simple, but : Obviously the thing to do is to be bullish in a bull market and bearish in a bear market.
23. If you begin right you will not see your profitable position seriously menaced and then you will find no trouble in sitting tight.
24. It never was my thinking that made the BIG MONEY for me. It was always my sitting . Got that? My SITTING TIGHT.
25.Even when one is properly bearish at the very beginning of a bear market it is well not to begin selling in bulk until there is no danger of the engine back-firing.
26. If a man didn't make mistakes he'd own the world in a month. But if he didn't profit by his mistakes he wouldn't own a blessed thing.
27. The only thing to do when a man is wrong is to be right by ceasing to be wrong. (William O'Neal advises cutting losses to no more than 8%)
28. When you want to get out, get out. Do not trade at limits.
29. Nobody should be puzzled as to whether a market is a bull market or a bear market after it fairly starts. It is therefore at the very inception of the movement that a man needs to know whether to buy or sell.
30. Millions upon millions of dollars have been lost by men who bought stocks because they looked cheap or sold them because they looked dear.
31. The thing to determine is the speculative line of least resistance at the moment of trading and a man should wait for the moment when that line defines itself, because that is the signal to get busy.
32. Stocks are never too high to buy or too low to sell. The price per-se, has nothing to do with establishing the line of least resistance.
33.It is never wise to disregard the message of the tape. Don't try to swim against the trend.
34. In a narrow market there is no sense in anticipating what the next big move is gong to be.The thing to do is to wait until the price breaks through the resistance in either direction.
IT DOESN'T PAY TO START WRONG IN ANYTHING.
35 Instead of hope you must have fear; instead of fear you must have hope. Always fear that your loss may develop into a much larger loss and hope that your profits may become a big profit.
36.A market can and does often cease to be a bull market long before prices generally begin to break. Usually stocks that had been the leaders retrace some points from the top and for the first time in many months do not come back, while the rest of the market is still advancing under new standard bearers.
37. Never try to sell at the top. Sell after a reaction if there is no rally.
38.In a bear market it is always wise to cover if complete demoralization suddenly develops.
39. There are certain chances that the must prudent man is justified to take.---chances that he must take if he wishes to be more than a mercantile mollusk.
40. A man may know what to do and lose money ---if he doesn't do it quickly enough.
41. Stocks are manipulated to the highest point possible and then sold to the public on the way down.It is astonishing how much stock a man can get rid of on the way down.
42. Always remember that in this game, the deadly enemies are:
IGNORANCE, GREED, FEAR and HOPE.
And here is a list of 20 'Trading Rules'.
( Most are the same as the old Jessee Livermore's Maxims.) ?
1. Never, under any circumstance add to a losing position.... ever!
Nothing more need be said !
2. Trade like a mercenary guerrilla. Fight on the winning side and be willing to change sides readily when one side has gained the upper hand.
3. Capital comes in two varieties: Mental and that which is in your pocket or account. Of the two types of capital, the mental is the more important and expensive of the two. Holding to losing positions costs measurable sums of actual capital, but it costs immeasurable sums of mental capital.
4. The objective is not to buy low and sell high, but to buy high and to sell higher. We can never know what price is "low." Nor can we know what price is "high." Always remember that sugar once fell from $1.25/lb to 2 cent/lb and seemed "cheap" many times along the way.
5. In bull markets is better to be long or neutral, and in bear markets only be short or neutral. That may seem self-evident, but it is not, and it is a lesson learned too late by far too many.
6. "Markets can remain illogical longer than one can remain solvent," according to Dr. A. Gary Shilling. Illogic often reigns and markets are enormously inefficient despite what the academics believe.
7. Sell markets that show the greatest weakness, and buy those that show the greatest strength. Metaphorically, when bearish, throw your rocks into the wettest paper sack, for they break most readily. In bull markets, we need to ride upon the strongest winds... they shall carry us higher than shall lesser ones.
8. It is better to respect "gaps", when they happen (especially in stocks) they are usually important.
9. Trading runs in cycles: some good, but most bad. Trade large and aggressively when trading well, but trade small and modestly when trading poorly. In "good times" even errors are profitable.In "bad times" even the most well researched trades can go awry. This is the nature of trading, accept it.
10. To trade successfully, think like a fundamentalist and trade like a technician. It is imperative to understand the fundamentals driving a trade, but also to understand the market's technicals. Then, and only then, should one trade.
11. Respect "outside reversals" after extended bull or bear runs. Reversal days on the charts signal the final exhaustion of the bullish or bearish forces that drove the market previously. Respect them, and respect even more "weekly" and "monthly," reversals.
12. Keep your technical systems simple. Complicated systems breed confusion and simplicity breeds elegance.
13. Respect and embrace the very normal 50-62% retracements that take prices back to major trends. If a trade is missed, wait patiently for the market to retrace. Far more often than not, retracements happen... just as we are about to give up hope that they shall not.
14. An understanding of mass psychology is often more important than an understanding of economics. Markets are driven by human beings making human errors and also making super-human insights.
15. Establish initial positions on strength in bull markets and on weakness in bear markets. The first "addition" should also be added on strength as the market shows the trend to be working. Henceforth, subsequent additions are to be added on retracements.
16. Bear markets are more violent than bull markets and so also are their retracements.
17. Be patient with winning trades, but be enormously impatient with losing trades. Remember that it is quite possible to make large sums trading/investing being "right" only 30% of the time, as long as the losses are small and the profits are large.
18. The market is the sum total of the wisdom ... and the ignorance...of all of those who deal in it. But dare not argue with the market. If we learn nothing more than this we've learned much indeed.
19. Do more of that which is working and less of that which is not. If a market is strong, buy more and if a market is weak, sell more. New highs are to be bought and new lows sold.
20. All rules are meant to be broken.
The trick is knowing when... and how infrequently this rule may be invoked !
Good Luck !!!
Bernard
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