1. Forget the
news, remember the chart.
You're not smart enough to know how news
will affect price. The chart already knows
the news is coming.
2. Buy the
first pullback from a new high. Sell the
first pullback from a new low.
There's always a crowd that missed the first
boat.
3. Buy at
support, sell at resistance.
Everyone sees the same thing and they're all
just waiting to jump in the pool.
4. Short
rallies not selloffs. When
markets drop, shorts finally turn a profit
and get ready to cover.
5. Don't buy
up into a major moving average or sell down
into one. See #3.
6. Don't
chase momentum if you can't find the exit.
Assume the market will reverse the minute
you get in. If it's a long way to the door,
you're in big trouble.
7. Exhaustion
gaps get filled. Breakaway and continuation
gaps don't. The old traders'
wisdom is a lie. Trade in the direction of
gap support whenever you can.
8. Trends
test the point of last support/resistance.
Enter here even if it hurts.
9. Trade with
the TICK not against it.
Don't be a hero. Go with the money flow.
10. If you
have to look, it isn't there.
Forget your college degree and trust your
instincts.
11. Sell the
second high, buy the second low.
After sharp pullsbacks, the first test of
any high or low always runs into resistance.
Look for the break on the third or fourth
try.
12. The trend
is your friend in the last hour.
As volume cranks up at 3:00pm don't expect
anyone to change the channel.
13. Avoid the
open. They see YOU coming
sucker
14.
1-2-3-Drop-Up. Look for
downtrends to reverse after a top, two lower
highs and a double bottom.
15. Bulls
live above the 200 day, bears live below.
Sellers eat up rallies below this key moving
average line and buyers to come to the
rescue above it.
16. Price has
memory. What did price do the
last time it hit a certain level? Chances
are it will do it again.
17. Big
volume kills moves. Climax
blow-offs take both buyers and sellers out
of the market and lead to sideways action.
18. Trends
never turn on a dime.
Reversals build slowly. The first sharp dip
always finds buyers and the first sharp rise
always finds sellers.
19. Bottoms
take longer to form than tops.
Greed acts more quickly than fear and causes
stocks to drop from their own weight.
20. Beat the
crowd in and out the door.
You have to take their money before they
take yours, period.
