my biggest tip from my years of trading, page-71

Great thread ... lots of sound advice.

I would add a few things that have worked for me:

1. The market, over the long term, goes up more than down (look at the historical trend line). For that reason I only trade stocks that are in clearly defined uptrends. I leave shorting stocks to those that want to play that game.

2. I try to identify the market sectors which are most bullish and target the better stocks in those sectors. Speculative stocks only make up a very minor section of my portfolio and are subject to stringent stops.

3. If a stock breaks trend and the sector that it is in also breaks trend - then I sell (without hesitation).

4. The difficulty arises when a stock's short term uptrend may falter. I will usually give it the benefit of the doubt if the sector that it belongs to is still showing bullish indications. But, once that changes to negative - I am out.

5. In a bear market there are fewer stocks (and sectors) to play with but there will always be some sectors and stocks in uptrend - the trick is to identify these and ride them all the way to the bank.

6. I don't set arbitrary "take profit targets" as selling too early can be costly. I wait until the uptrend (usually medium term uptrend - sometimes long term uptrend) is broken before I exit. That means one can ride those big wave winners.

7. So, in summary, - if I had to encapsulate in one line the essence of a sound strategy it would be this: "Let your winners run and cut the losers quickly" ... so, two or three winners should see you ahead even if you backed 6 or seven losers.

Happy trading / investing.