Principles or rules if you like:

These can be helpful on our journey:

To take part in the markets, one needs rules in order to survive and thrive. Those who don't obey their rules or don't even have rules can't expect to succeed in the long run. Rules are the critical component of any investment or trading method.

Sun Tzu: "He will win who knows when to fight and when not to fight."

The good news is that implementing rules is fairly easy while optimizing rules is more demanding. The not so good news is that many involved with the markets have yet to even consider rules.

It's not about being in the market at all times nor is it about being right, it's knowing when to be in and when one is wrong, what to trade and how.

Buying and selling based on articles and opinions found on the internet are not sufficient, one must own the whole process of discovery and planning.

Some suggestions:

  • Is the company's revenue and / or earnings accelerating?

  • Something new about the company or it's products?

  • Increase in institutional ownership?

  • Political headwinds or tailwinds?

  • Industry group leading or lagging?

  • Bond market bullish / bearish, spillover effect into equities?

  • Macro conditions favourable?


Clearly there are numerous metrics to consider, what works best for you?

The most important factor:

Risk management is the most critical component of any investment strategy, a key deeply embedded in my thinking and my courses. Through simple, yet strong risk metrics combined with a high degree of self awareness through a trade journal should help you prosper!

For many, using an objective signal such as a simple moving average or cross over, could be invaluable. If one intends to stay in the market for the long run, the capital must be preserved at all costs regardless of hubris.

Good luck!