Rules for Investing and Trading

To play the game of investing and trading, you have to know the rules. Otherwise, you will give your hard-earned money to others who do know the rules. I've read many financial books but Market Wizards: Interviews with Top Traders by Jack D. Schwager and Reminiscences of a Stock Operator by Edwin Lefevre remain my best playbooks on how the game is played.

Commit these rules to heart and you should benefit over the long run:

1. "There is nothing new in Wall Street." Lefevre at page 10

2. The trend is your friend.

3. "I wasn't patient enough to wait for a clearly defined situation." Schwager at page 18

4. "I always made money when I was sure I was right before I began. What beat me was not having brains enough to stick to my own game--that is, to play the market only when I was satisfied that precedents favored my play." Lefevre at page 21

5. Stay in markets with major trends. Schwager at page 23

6. "Whenever I read the tape by the light of experience I made money, but when I made a plain fool play I had to lose." Lefevre at page 21

7. "Ed Seykota would never get out of anything unless the trend changed." Schwager at page 24

8. "Of course, I let the craving for excitement get the better of my judgment." Lefevre at page 22

9. "When news comes out, the market should act in a way that reflects the right psychological tone. For example, a bull market should shrug off bearish news and respond vigorously to bullish news." Schwager at page 27

10."The desire for constant action irrespective of underlying conditions is responsible for many losses in Wall Street even among the professionals, who feel that they must take home some money every day, as though they were working for regular wages." Lefevre at page 22

11. "I knew that the big money was going to be made on the trades that met my criteria. There will always be trades that meet those requirements, but there may be fewer of them, so you have to be much more patient." Schwager at page 28

12. "There is only one side to the stock market; and it is not the bull side or the bear side, but the right side." Lefevre at page 36

Have a Happy Thanksgiving!

Standard Disclaimers
1. This blog is for educational purposes only.
2. None of the individuals associated with the Las Vegas TSP Investment Club are registered financial advisors.
3. This blog is not an offer to the public to buy or sell any stocks, options, commodities or futures.
4. You are encouraged to do your own due diligence and to consult with a professional financial advisor before making any investment decision.
5. This blog cannot take responsibility for the results of your investment and trading decisions.