I am in the world of trading and investing in stocks for nearly four years now. In that period I have created a portfolio of golden rules which I would like to share with you.
1. Never add to a losing position.
2. When buying a stock you should always have a stop-lost and a target price levels.
3. Be humble, you will make many mistakes, accept and learn to live with them.
4. Have a strategy. Even the worst strategy is better than not having any.
5. Do not trade against the trend.
6. Never short a stock with strong story behind, no matter where is the price.
7. Sell before an earning announcement.
8. Buy stocks with positive story behind.
9. Do not sell a winning position which is still in an uptrend.
10. Do not buy a stock which has already performed strongly after a good news.
11. Never put all your money in one stock.
12. Do not over diversify. If you have too much stocks, you are most probably gambling.
13. Learn to stay in cash.
14. Do not stay in a stock which is in a downtrend.
15. When you see an opportunity - play big, do not try to diversify.
16. Do not marry to a position.
17. 90% of successful trading comes from good risk management.