(a) One should make sure that one does not get lured to the tendency of adding to a losing position because the stock which has to perform will perform from the word go and a falling stock is like a knife.(b) Mental appreciation of a profit and holding the losses on paper to avoid seeing the same physically can harm you in double manner. Exit out of a losing position ruthlessly.
(c) The hard trade is the right trade: If it is easy to sell, don’t; and if it is easy to buy, don’t. Do the trade that is hard to do and that which the crowd finds objectionable.
(d) Make sure that one trades the first day of a gap as these gaps suggest violent new action. One must respect these gaps as these are very important from trading point of view.
Click Here to Get Free Stock Market Technical Analysis Tips and Charts in Email
