1. The very first and usually the worst mistake, which newbie traders do, is adding to a losing position. Of course, it improves your average price. But is it really a good idea? Or you simply increase the loss from the position, going against you? In my opinion, this is exactly the case.… and this is what you should avoid. If you follow our chat, then, maybe, noticed, that we rarely average against ourselves… we add to the position or double it, only when she walks our way. The reason is simple: if a stock уже идет против вас, and you keep thinking about position averaging, then this is a direct path to ruin. The only case, when averaging might be a good idea, this is the situation, when you take a stock for a medium term and have predetermined an action plan. If you take a position on intraday, then there is no good reason, why you should average in a losing position.
2. If you have closed part of the profit in a position, set a stop on the remainder of the price level to enter the position. Kunal taught me this principle, and I think, that it is very useful in trading… this way you will never give profit on the position, which gave you a plus. No doubt, есть ситуации, when you are better off acting quickly and completely out of position, but in most cases, with a favorable market, this is your best trading plan. This is how you can maximize your results..
3. If you made money in stocks, then in no case go into it again, until you see convincing signals to enter. This happens all the time with many traders., I used to do this on a regular basis. This is a trade on emotions. You enter the action… you make good money in it… and she continues to move on… you enter it again at a terrible price and observe that, how does she go against you, забирая прибыль. Avoid it!
4. Never hold a stock ahead of a quarterly or FDA release… it's a casino. Can equally bring you money, so pick them up.
5. Never Short Strong Stocks Before Lunch. This is my personal rule, which I really like. Promotions, on which news / PR / quarterly reports came out can go a lot… especially if their daily trading volume is low. So don't ever think, that the stock just can't go further up… because I guarantee you – maybe! Просто посмотрите на charts SUPN, ROSG, HEAT. According to my observations, such actions make a colossal move in the first half of the day and then roll back in the afternoon.… wait for good situations before going short. It will save you tons of money.!
6. Never trade with nothing to do, expect good situations and stick to a clear trading plan for each trade.
7. Cut losses quickly, small losses are not terrible.
Maribeth Willoughby
