Five star | *****| Trading Checklist FAQs | LiteFinance

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#TradingCheckList #RiskManagement #5-3-1Rule #1PercentRule #90PercentRule #No1RuleOfTrading #RuleOf20 #50-50Rule #TradingRules #MyRules #531Rule #5050Rule #TradingRules

What is a trading checklist?

A trading checklist is a predefined set of criteria a trader uses to evaluate potential trades, ensuring alignment with their trading plan and risk management strategies.

What is the 5 3 1 rule in trading?

The 5- 3- 1 rule in trading stands for analyzing 5 indicators, considering 3 different time frames, and focusing on 1 particular trading opportunity to minimize risk and enhance decision-making.

What is the 1% rule for traders?

The 1% rule for traders dictates that no more than 1% of a trader's capital should be risked on a single trade, promoting long-term sustainability by managing potential losses.

What is 90% rule in trading?

The 90% rule in trading suggests that 90% of your trading success is due to psychological factors and discipline, while only 10% relies on technical analysis and strategy.

What is No 1 rule of trading?

The No 1 rule of trading emphasizes the importance of a well-defined trading plan, guiding traders to make decisions based on logic rather than emotion, crucial for consistency.

What is the rule of 20 trading?

The rule of 20 in trading advises traders to not have more than 20% of their trading capital exposed in the market at any given time to manage risk effectively.

What is the 50 50 rule in trading?

The 50 50 rule in trading refers to the understanding that, despite thorough analysis and a solid trading plan, the outcome of any trade has an inherent 50% chance of success.

Julia's notes:

1. Be a trader following rules first
2. I have to discipline myself first, following the above rules - 1% rule for traders
3. 1% rule for traders - set stop loss - 1%
4. Forget those big loss on SABR stock, I need to learn how to make money on other stocks first; I will go back to work on risky stock like SABR later
5. Try to memorize those rules - 6 rules, rules about risk management, percentage in the market, technical analysis and chance of success - inherent 50% chance of success
6. First rule to follow - 1% rule for traders - no big bet - change my behavior

Jim Cramer's Real Money Radio Recap 7/28

#TradingRules #TradingCommands #JimCramerRules #FirstLoss #BestLoss #TradeIntoInvestment #TradingGain #InvestmentLoss #Trader #InstitutionInvestors #JimCramer #10Commandments  

Miriam Metzinger

Recap of Jim Cramer's radio show on Thursday July 28. Click on a stock ticker for more analysis:

Cramer's 10 Commandments - Cramer reviews the 10 Commandments of investing he developed when dealing with the market in the 90s.

1. Never Turn a Trade into an Investment: Don't sit on a trade if it isn't doing what you expected it to do.
2. Your First Loss is Your Best Loss: If your trade starts moving downward, follow your instincts and get out quickly. "People can feel when a trade is going awry, but because of ego, because of pigheadedness, they don't want to hear the thunder,"
3. It's OK to Take a Loss when You Already Have One: People are often in denial about losses if they are just on paper, but it is better to go ahead and take a stock off the table than to deal with the pain later on.
4. Never Turn a Trading Gain into an Investment Loss: If a trade is making you money, cash in, and don't treat it like an investment. Cramer once broke this rule and lost an enormous amount of money. "A trade is just a trade. If you turn it into an investment, you are overstaying your welcome."
5. Tips are for Waiters: Rely on your own homework and not on stock rumors.
6. You Don't Have a Proft Until You Sell: Sometimes people delay selling because they are worried about taxes, but the loss incurred by waiting will be much greater than what you will pay Uncle Sam.
7. Control Your Losses Because the Winners Take Care of Themselves: Keep track of your portfolio and weed out problem stocks. Don't sit and wait for a poor stock to make a comeback.
8. Don't be Afraid that You are Missing Out: If you are concerned about missing out, you are probably coming in to late, and it is a better idea to wait for the next opportunity.
9. Don't Trade on the Headlines: The press just wants to tell a good story, and are rarely correct about the market.
10. Don't Trade on Flow:If you see a trend, you might think others know something you don't, but if you go with the flow, you could get taken down.

 

William O’Neil Trading Rules | Trading rules | My favorite | Rules to remember | 2024

#tradingrules #IBDDigital #IBDStopLoss #IBDFindStock #IBDAddPositionRule #IBDRules #IBDBible #IBDTradingRules

William J. O’Neil is one of the greatest stock traders of our time, achieving a return of 5000% over a 25 year period.

He uses a trading strategy called CANSLIM, which combines fundamental analysis, technical analysis, risk management and timing.

You can learn this exact trading strategy in his best selling book, How To Make Money In Stocks: A Winning System in Good Times and Bad.

His financial successes led him to:

• Open a brokerage firm, the William O’Neil & Co.
• Founded a national financial daily newspaper called Investor’s Business Daily.
• Became the youngest person to buy a seat on the New York Stock Exchange.

23 William O’Neil Trading Rules, That Will Make You a Better Stock Trader 

By Rayner Teo

In case you’re wondering:

What is the William O'Neil CANSLIM trading strategy?

CANSLIM is an acronym and stands for:

• C: Current quarterly earnings per share (up at least 25% vs. year-ago quarter).
• A: Annual earnings increases at a compound rate of no less than 25%.
• N: New products, new management and new highs.
• S: Supply and demand. Stocks with small floats experience greater price rises, plus big volume demand.
• L: Leaders and laggards. Keep stocks that outperform and get rid of the laggards.
• I: Institutional ownership. Follow the leaders.
• M: Market direction. Three out of four stocks follow the trend of the market. When the intermediate trend is bearish, don’t invest.

23 Trading Rules That Will Make You a Better Stock Trader

1. Don’t buy cheap stocks. Buy Nasdaq stocks mainly selling between $15 and $300 a share and NYSE stocks from $20 to $300 a share. Avoid the junk pile.
2. Buy growth stocks that show each of the last three years annual earnings per share up at least 25% and the next year’s consensus earnings estimate up 25% or more. Most growth stocks should also have annual cash flow of 20% or more above EPS.
3. Make sure the last two or three-quarters earnings per share are up a huge amount. Look for a minimum of 25% to 30%. In bull markets, look for EPS up 40% to 500% (The higher, the better).
4. See that each of the last three-quarter’s sales is accelerating in their percentage increases, or the last quarter’s sales are up at least 25%.
5. Buy stocks with a return on equity of 17% or more. The best companies will show a return on equity of 25% to 50%.
6. Make sure the recent quarterly after-tax profit margins are improving and near the stock’s peak after-tax margins.
7. Most stocks should be in the top five or six broad industry sectors.
8. Don’t buy a stock because of its dividend or P/E ratio. Buy it because it’s the number one company in its particular field in terms of earnings and sales growth, ROE, profit margins, and product superiority.
9. Buy stocks with a relative strength of 85 or higher.
10. Any size capitalization will do, but the majority of your stocks should trade an average daily volume of several hundred thousand shares or more.
11. Learn to read charts and recognise proper bases and exact buy points. Use daily and weekly charts to materially improve your stock selection and timing. Buy stocks that initially breakout out of sound and proper bases with volume for the day 50% or more above normal trading volume.
12. Carefully average up, not down, and cut every single loss when it is 7% or 8% below your purchase price with absolutely no exception.
13. Write out your sell rules that show when you will sell and nail down a profit in your stock.
14. Make sure your stock has at least one or two better-performing mutual funds who have bought it in the last reporting period. You want your stocks to have increasing institutional sponsorship over the last several quarters.
15. The company should have an excellent new product or service that is selling well. It should also have a big market for its product and the opportunity for repeat sales.
16. The general market should be in an uptrend and either favour small or big cap companies.
17. The stock should have ownership by top management.
18. Look for a “new America” entrepreneurial company rather than laggard, “old America” companies.
19. Forget your pride and ego; the market doesn’t know or care what you think. No matter how smart you think you are, the market is always smarter. A high IQ and a master’s degree are not guarantees of market success. Your ego could cost you a lot of money. Don’t argue with the market, and never try to prove you’re right and the market is wrong.
20. Watch for companies that have recently announced they are buying back 5% to 10% or more of their common stock. Find out if there is new management in the company and where it came from.
21. Don’t try to buy a stock at the bottom or on the way down in price, and don’t average down (If you buy at $40, don’t buy more if it goes to $35 or $30).
22. If the new appear to be bad but the market yawns, you can feel more positive. The tape is telling you that the underlying market may be stronger than many belief. On the other hand, if highly positive news hits the market and stocks give ground slightly, the tape analyst might conclude the underpinnings of the market are weaker than previously believed.
23. 37% of a stock’s price movement is directly tied to the performance of the industry group the stock is in. Another 12% is due to strength in its overall sector. Therefore, half of a stock’s move is due to the strength of its respective group.

10 common mistakes most traders make

1. Stubbornly holding onto losses.
2. Buying on the way down in price.
3. wanting to make a quick and easy buck.
4. Buying on tips, rumors, split announcements, and other news events, stories, or opinions you hear from supposed market experts on TV.
5. Selecting second-rate stocks because of dividends or low P/E ratios.
6. Buying because of old names you’re familiar with.
7. Being afraid to buy stocks that are going into the new high ground in price.
8. Cashing in small, easy-to-take profits while holding the losers.
9. Not being able to make up your mind when a decision needs to be made.
10. Concentrating your time on what to buy and once the buy decision is made, not understanding when or under what conditions the stock must be sold.