Peter Wyckoff Thirty-two Rules

 Peter Wyckoff Thirty-two Rules.

1. Speculation demands cool judgment, self-reliance, courage, pliability and prudence.

2. A person's planning buying policy should always dovetail closely with a predetermined selling policy.

3. When in doubt about what to do in the market, do nothing. Nothing can destroy the cool temperament of a man like unsystematic speculation.

4. Look after the losses and the profits will take care of themselves.

5. If you wait too long to buy, until every uncertainty is removed and every doubt is lifted at the bottom of a market cycle, you may keep on waiting ... and waiting.

6. The worst losses in the market come from uninformed people buying greatly overvalued stocks.

7. Whenever hope becomes a chief factor in determining a market position, sell out promptly.

8. Never buy or sell merely on the basis of background statistics. Technical market considerations and psychology must also be taken into account.

9. Don't believe everything a corporate official says about his company's stock.

10. Check over all the facts carefully yourself and view them conjunctively with other known market factors.

11. Never speculate with the money you need to live. If you can't afford a possible loss, stay out of the market.

12. One way to win in the market is to avoid doing what most others are doing.

13. When opinions in Wall Street are too unanimous - BEWARE! The market is famous for doing the unexpected.

14. Never cancel a Stop, or lower it, as the stock nears a trading point in a fast sliding market.

15. Try to analyze your weak points and convert them into strong ones.

16. Forget the idea that speculation depends entirely upon luck, and guard against blind faith in the suggestions of other men.

17. Eliminate trust in any system you do not understand, but still believe in the basic idea of the system.

18. You should consult other market aids besides charts.

19. Never be sentimental about a stock.

20. Before investing in a stock, look into its history.

21. You should be impervious to external forces and have no preconceived opinions to be a successful tape reader. Only the price changes appearing on the tape with attendant trading volume will tell you what to do and when to do it.

22. Always try to look and plan ahead, rather than considering just the last sales bobbing in front of you. The printed prices you see may have already largely discounted the news as it generally is known.

23. Tape reading is no exact science. You cannot form any definite rules, because all markets differ. Therefore, you must work out your own operational methods.

24. Be pliable at all times, but don't overtrade. Plan each campaign carefully, and never blame the tape for any error you may make.

25. You should be able to differentiate between what has been, what is now and what the future will be in planning a trading program.

26. Before taking a position, determine exactly where the stock you are watching, or the general market, stands. A study of price, breadth, activity, time and volume will be helpful in this respect.

27. Whatever is hard to do in the market is generaly the right thing; and whatever is easy is usually the wrong thing to do.

28. Take an occasional mental inventory to find out exactly where you stand.

29. Do not press yourself! "Speculitis" is malignant!

30. When buying a stock, you should consider how far down it might carry in the event your judgment about it is wrong.

31. Try to avoid holding postmortem examinations of the "might have beens" in the market.

32. Buy the stocks of companies that have shown gradually increasing earnings in industries making articles that people cannot do well without.

From The Psychology of Stock Market Timing, Peter Wyckoff, 1968, Prentice-Hall, extracted from Investment Psychology Explained, Martin J. Pring, 1993, John Wiley & Sons.