From Aksier,
"For many years I experienced the same as you guys. Then several years ago I spent a lot of time reviewing my prior performance and made some startling revalations:
Most importantly I discovered that my research was indeed identifying some outstanding investments (multibaggers) but the problem was that I had never believed in myself enough to hang around for the real gains. So I just wasn't getting the big profits to offset the small to medium losses that are inevitable in this game.
Here are some key thoughts / beliefs of mine:
Belief in Your Abilities: For many years I didn't believe that I had what it takes to be successful at trading. I can't tell you how important it is to visualise yourself operating as a successful trader and to believe in your abiliies. At the same time you must accept that you will always get trades wrong and make losses. Now I never question whether I can make a good living.
Continuous Research: It is important to undertake both detailed and ongoing research necessary to identify and maintain your knowledge about the potential "big" gainers for your portfolio which will more than offset the small to moderate lossses you will inevitably suffer.
Trade Size: My trade size is based on my available pool of capital. Earlier in my career as a trader position size was based on arrogance due to a few successful trades. The truth is that trade / investment position size should always be linked to available capital.
Entering a Trade: Now when I enter a trade I do so with confidence and I believe in myself, whilst accepting that some trades will result in losses. For this reason most of the time I no longer get any adrenilin pumping through my veins when I open a trade. When I feel like this after taking a position I know that I am trading in "The Zone". The only time I tend to feel some adrenalin is usually immediately after I have had a break from trading for some time.
Be Happy to Take Your Medicine: I don't hesitate to admit when I have got it wrong and am prepared to take a loss (sometimes still at later point in time than I should). Losses left unchecked usually become bigger and end up being a drag on yur confidence.
Detailed Record Keeping: Keep detailed records so you can measure and analyse your performance at both a summarised and a detailed level. I have a spreadsheet which is 5MB in size. It has one sheet from every stock I have traded in a financial year (currently 121 separate sheets for ASX and international stocks plus summaries), a budget sheet, a wealth target sheet and a summary sheet which brings all the detail together.
Most of all I honestly believe that it takes many years of training to develop the skills necessary to be successful in share trading. It took me more than 10 years before I got there so be prepared for a long road but when you achieve success it is definitely worth it.
And let me tell you I am still learning every single day!"
I wish you the best of Luck.
And one more.
Market Wizard Linda Raschke’s Technical Trading Rules
1. Buy the first pullback after a new high. Sell the first rally after a new low.
2. Afternoon strength or weakness should have follow through the next day.
3. The best trading reversals occur in the morning, not the afternoon.
4. The larger the market gaps, the greater the odds of continuation and a trend.
5. The way the market trades around the previous day’s high or low is a good indicator of the market’s technical strength or weakness.
6. The previous day’s high and low are two very important “pivot” points, for this was the definitive point where buyers or sellers came in the day before. Look for the market to either test and reverse off these points, or push through and show signs of continuation.
7. The last hour often tells the truth about how strong a trend truly is. “Smart” money shows their hand in the last hour, continuing to mark positions in their favor. As long as a market is having consecutive strong closes, look for up-trend to continue. The up trend is most likely to end when there is a morning rally first, followed by a weak close.
8. High volume on the close implies continuation the next morning in the direction of the last half-hour. In a strongly trending market, look for resumption of the trend in the last hour.
9. The first hour’s range establishes the framework for the rest of the trading day.
10. A greater percentage of the day’s range occurs in the first hour then was the case in the past, and thus it has become increasingly important to trade aggressively if there are early signs of a strong trend for the day.
11. There are four basic principles of price behavior which have held up over time. Confidence that a type of price action is a true principle is what allows a trader to develop a systematic approach. The following four principles can be modeled and quantified and hold true for all time frames, all markets. The majority of patterns or systems that have a demonstrable edge are based on one of these four enduring principles of price behavior. Charles Dow was one of the first to touch on them in his writings.Principle One: A Trend Has a Higher Probability of Continuation than Reversal Principle Two: Momentum Precedes Price Principle Three: Trends End in a Climax Principle Four: The Market Alternates between Range Expansion and Range Contraction!
12. In the world of money, which is a world shaped by human behavior, nobody has the foggiest notion of what will happen in the future. Mark that word – Nobody! Thus the successful trader does not base moves on what supposedly will happen but reacts instead to what does happen.
And here's Gizard's Rules. I found em.
1) Set stops – never lose more than 15% in any 1 trade
2) Never more than 5% of your capital in any one stock
3) 2% rule , never lose more than 2% of your capital in any one trade
4) THE TREND IS YOUR FRIEND -------------------------- live by this
5) Follow the money and always take profits, never ever ever ever average down, you were wrong once and you will probably be wrong again
6) Never trade on leverage or margin. If you are good you don’t need to borrow. If you don’t have the money you aren’t ready
7) The ”market” knows more than you do, NEVER buy into down trending stocks
8) Pyramid into winning trades. ie buy more as they go up, the opposite to averaging down
9) In every trade there is a smart person and a dumb one, which one are you? You are the dumb one until you prove otherwise
10) NEVER believe management, believe the share price
11) Never buy into floats if you are an “average joe”, If its any good you wont get any, if it’s a dog you’ll get heaps
12) Brokers and financial planners and newsletter writers are salesmen. If they were any good they wouldn’t need you
13) The golden rule “He who has all the gold makes all the rules”. The people who “control” companies make decisions for their benefit only. You are just a pain in the backside
14) There are none so blind as those who do not wish to see
15) Chat sites are filled with insiders, be wary of any person who only posts on one or two stocks.
