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- Break your own rules if the fundamental economical calculations are favorable.
- Investing is NOT and should NEVER be thought as equal to or be compared with betting.
- Think for yourself, be independent, believe in your calculation, even if the market behaves oppositely.
- Seasoned investors profit by pumping/dumping stocks and publishing news that is opposite of the true value calculation of stocks.
- Never invest based on instinct or feelings, seasoned hedge investors are good at framing the market's overall opinion to be the opposite of reality.
- If you don't have a trusted calculation of what is the most probable outcome, the best decision you can make is to not buy any stock.
- Buy when everyone's panicking and selling off and no one is talking about buying.
- No matter what, western economies in the 21st+ century will always recover unless the balance of power shifts after a world war.
- Don't speculate the performance of a stock, only look at the facts and then choose what you want to buy.
- When you invest, you are actually becoming the business owner as well.
- Think of your invested company's business critically in terms of investments vs output.
- If you are smart, you don't need to borrow or leverage money to invest more. If you are not smart, its a bigger reason not to use it. Leverage is only recommended for full-time active hedge investors studying the market 60hrs/week.
- If a company's assets are more than the total monetary value of that company on the market, it means the company is undervalued, making it a good BUY.
- Wait for the market to get undervalued and oversold, then buy the business you believe is truly valuable in the time of economic turmoil &/or a good long term investment.
- Remember that the Pros know when YOU shall be making the wrong assumptions / timings about investing and SELLING.
- When you do make a mistake, the Pros will do everything in their power and experience to get your money into their hands, because that's how they make the most of their money.
- Rookies who think they can beat the PROs end up giving most of their principal to the PROs.
- Investing is a calculated financial transfer of wealth initiated based on multiple factors that are universally accepted by investors.
- Do not mistake investing to be an intelligence-driven game.
- Investments are ONLY driven by knowledge, psychology, and experience.
- NEVER invest more than 20% of your money in a single asset/stock/option/leveraged-ETF.
- Diversify your investments across at least 3 of the following sectors: startups, blue-chip stocks, divident-stocks, real estate, ETFs, Crypto, commodities/bonds, etc.
- Evaluate your own performance as an investor regularly. If you are not succeeding, STOP and begin only after you understand why you lost money.
- Options trading / Futures contracts are the fastest way to make money but it is also the fastest way to lose it. Do not get in over your head; if you are reading this article you should know you cannot compete with the PROs unless you are studying the market for at least 60hrs/week.
- Remember, to make a profit in options; you have to predict the FUTURE. You will almost always underestimate how wrong you can be.
- Do not mistake the probability of winning/losing in options trading to be 50%, realistically the probability of profit is only 25%-33% for an EXCELLENT trade.
- Do not believe in profits made from exceptional trades.
Such trades are more accidental than exceptional.
Such trades are also not practically available most of the time, a PRO always knows that.
- For options trading; multiple factors like timed ownership, limited buyer/seller availability, min/max price requirements, activity limitations in premarket and postmarket timings, etc extremely limit your chances of making profits.
- A more realistic, less time-intensive, reliable and conservative way of making money in investing in commodity (gold, silver, palladium) ETF's.
- If you THINK you are a day trader, remember that real day traders have financial trading as their primary job; just like you would in your own field.
- Don't be revengeful of the investment market, if you lose money, the market doesn't owe you anything. You start every day fresh no matter how much you have made or lost previously.
The market doesnt care how much money you made/lost yesterday.
- Sign up for trade alerts and news, over time as you relate a stock/commodity's performance/cost to the news you will be able to separate real facts from the real noise.
- Be patient, if you are a longterm investor pull/buy out of a investment only if/after it falls 15-20% below your expectation/initial buying price as fluctuations between 1-14% are fairly normal in a day.
- Invest only after you understand the dynamics of a financial sector; what principally governs and influences it.
- In the beginning stick to blue-chip investments, these are investment opportunities that are the most popular, relatively safe and have a low but consistent return over the span of a minimum of 5 years.
- When the stock market is falling, the price of commodities like crude oil (WTI) and natural gas goes down as well. This happens because purchase of oil and investments in oil production decrease with the fall in the stock market.
- When the stock market opens up in premarket at 9AM EST; and the stock prices are already high at the beginning of the day, there is definitely going to be a selloff for most stocks after the premarket ends at 9:30AM PST. So it is advisable to sell stocks before/at 9:30AM and then buy them back again when their price has stabilized to a lower value later in the day at half-time.
- When there is a selloff in the morning (Premarket or after opening); this selloff will eventually fall further till 11AM at the minimum, after that the market makes the effort to rise again and in most cases is able to recover to premarket levels or just below market open levels. In ~20% cases the market will fall further later in the day with the mid-day price increase being a bull trap.
- If stocks are down or stable in premarket; their price cannot be predicted after the premarket ends.
- Your current pofit/negative position in an investment doesnt matter. The ONLY thing that matters is how that stock is going to perform tomorrow.
If you have data to believe that it will do, you stay invested or BUY more.
If you believe it will stay the same, You SELL.
- You have only lost your money only if you SELL your position. Be comfortable with temporary loss "positions".
- Sell all your stock options (calls/puts) before end of trading day if earnings are going to be announced after-hours on same day or pre-market the next day.
- Buy puts when a non-profitable company's stock PE ratio is >50; buy calls when it's PE ratio is <5.