Jim Cramer's Real Money Radio Recap 7/28
#TradingRules #TradingCommands #JimCramerRules #FirstLoss #BestLoss #TradeIntoInvestment #TradingGain #InvestmentLoss #Trader #InstitutionInvestors #JimCramer #10Commandments
Recap of Jim Cramer's radio show on Thursday July 28.
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.
My understanding:
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.
1. Never Turn a Trade into an Investment
- Do not hold on a position too long without any stop loss.
- Sell to have gain when position has some gain.
- I have to set any position a stop loss to protect the capital. Do not take risk.
- First loss is my best loss. It is true. There is always opportunity to have some gain. Do not hold the position and marry the stock.
- It is OK to take a stock off the table, do not gamble for market risk like earnings report. Specially do not hold a small capital stock too big position and too long.
