Trading Rules

When I surfed the internet, I found the info below which I think are important and helpful, so I post them here again for your convenience:

Trading Rules:

- Do not blindly follow advisory services, newsletters
- Do not blindly accept a broker's advice
- Do not listen to rumors.
- Do not listen to the news about investments and trading without filtering.
- Do not listen to hot tips without filtering.
- Ignore Wall Street sayings, no matter how ancient or revered.
- Ignore insiders, they are often absolutely the worst judges of their own stock.
- Trade only in highly liquid instruments.
- Make all decisions and plans before the market opens.
- Do not change decisions and plans after the market opens.
- Make plans for all contigencies, good and bad, pre-market.
- Pyramid up longs, pyramid down shorts, if trade proves right.
- Cut losses quickly. If a trade goes against me, get out.
- For volume shares, get in, in stages, as the trend proves out.
- Let profits ride if there is no good reason to close out the position.
- Set a price stop and a time stop.
- Transfer half of winnings to cash, out of trading accounts, periodically.
- Never overtrade.
- Never completely and at once reverse a position.
- Run quickly or not at all at the first approach of danger.
- When doubtful, reduce the size of the trade.
- It is better to average up than to average down.
- Public opinion is not to be ignored.
- Quiet weak markets are good markets to sell(but buy in Thai stock market).
- In forming opinions, the element of chance should be included.

Sources:
Darvis, Nicolas – “How I Made $2,000,000 in the Stock Market” 1986
Livermore, Jesse – “How to Trade in Stocks” orig. publ. ~60+ years ago
Wyckoff, Richard – “Stock Market Technique Number 2” 1934

Note: we did some editing to be applicable to SET.


Below are some tips that apply especially to the thai market:

- Buy or stay invested if foreigners are buying for several days, sell or stay in cash if foreigners are selling

- The set closes up on fridays more often than it closes down (in a ratio of 5:3), mondays vice versa

- Buy stocks on closing and sell on opening-if the dow rallies 1% or more, the set usually ends weak the following day, so it is a good opportunity to sell on the opening. if the dow plunged 1% or more, buy on the opening.

- Most of ipo's open near the day high and close near the day low