My goal is to help speed up your learning curve with proven systems & analysis. Investor, Swing trader, Educator, IBD Meetup leader. Grateful Husband & Father.
Friday, July 11, 2025
H.J. Wolf's Ten Rules
H.J. Wolf's Ten Rules.
1. Do not overtrade.
2. Limit losses. Place stops at technical danger points on
all trades, and if the location of the danger point is uncertain use a 2-point
or 2-point stop, or await a better opportunity.
3. Follow the trend. Do not buck the trend, and do not
hedge. Be either long or short, but not both at the same time.
4. Favor active issues. Do not tie up funds in obscure or
inactive stocks, and avoid thin-market issues except in long-pull operations.
5. Buy during weaknesses. Buy only after reactions
confirming higher support.
6. Sell during strength. Close out on unusual advances at
first sign of hesitation; and sell short only after evidence of distribution
with lower support followed by lower top.
7. Distribute risk. Do not concentrate in one issue, but
trade in equal lots of several different issues, aloof which are definitely
attractive. Avoid spreading over too many different issues.
8. Protect profits. Never let a 3-point profit run into a
loss, and never accept a reaction of over 5 points unless the favorable trend
of the stock has been definitely established.
9. Avoid uncertainty. When the trend is in doubt, stay out.
Avoid a trader's market when the ultimate trend is uncertain unless the trade
can be protected by a small stop and justifies the risk.
10. Discount fundamental outlook. Never ignore fundamental
conditions, and always favor the trade wherein fundamental and technical
conditions cooperate. Avoid a trade wherein fundamental and technical
conditions are opposed, except in cases of imminent liquidation, or
overextended short interest.
From Studies in Stock Speculation, Volume II, H.J.
Wolf, 1985, Fraser Publishing Company, extracted from Investment
Psychology Explained, Martin J. Pring, 1993, John Wiley & Sons.
Frank Williams' Rules
Frank Williams' Rules most likely refers to "If You Must Speculate, Learn the Rules," a book written by Frank J. Williams in 1930. This book, written in the aftermath of the 1929 stock market crash, offers guidance on safe and responsible speculation in the stock market.
Here's a more detailed explanation:
- The book was written during the Great Depression, a time of significant economic instability.
- The book provides advice on whether one is suited for speculation, warning signs in one's financial situation, responsible use of margin trading, finding reliable information, and the importance of avoiding tips.
- Frank J. Williams was likely an investor or financial writer who saw the need to guide individuals on how to navigate the complexities of the stock market during a precarious economic period.
Frank Williams' Rules
Frank Williams' Rules.
1. Pay all bills before speculating.
2. Don't speculate with another person's money.
3. Don't neglect your business to speculate.
4. If the market makes you irritable or interferes with
sleep, you are wrong.
5. Don't use in the market money that you need for other
purposes.
6. Don't go "joint account" with a friend - play a
lone hand.
7. Don't give a broker "discretionary power." If
you can't run your own account, leave the market alone.
8. The broker who demands a large margin is your friend.
Only a bucket-shop wants you to trade on a slender margin.
9. Don't buy more stock than you can safely carry.
Over-trading means forced selling and losses.
10. Get accurate information. Demand facts, not opinions.
11. Don't take advice from uninformed people - they know no
more than you about the market.
12. Such advice as "I think well of it" or
"It is a cinch" means nothing.
13. Use only a part of your capital in speculation.
14. Don't buy "cats and dogs" (unseasoned stocks).
15. Buy good standard stocks that have stood the test of
time.
16. Remember that good stocks always come back - unknown
stocks may disappear.
17. Don't buy in a hurry - there is plenty of time to buy
good stocks.
18. Investigate each stock thoroughly before you buy.
19. Remember that it is easier to buy than to sell. The
salability of a stock is very important.
20. The market moves up slowly, but goes down fast.
21. Be prepared to buy your stock outright if necessary. If
you can't do this, you are taking chances.
22. Buy in a selling market - when nobody wants stock.
23. Sell in a buying market - when everybody wants stock.
24. The market is most dangerous when it looks best; it is
most inviting when it looks worst.
25. Don't get too active. Many trades many losses.
26. Long-pull trades are most profitable.
27. Don't try to outguess the market.
28. Look out for the buying fever; it is a dangerous
disease.
29. Don't try to pick the top and the bottom of the market.
30. Don't dream in the stock market; have some idea just how
far your stock can go.
31. Remember that the majority of traders are always buying
at the top and selling at the bottom.
32. Don't worry over profits you might have made.
33. Don't spend your paper profits - they might turn into
losses.
34. Watch the news. Remember that the market actually is a
barometer of business and credit.
35. Don't buy fads or novelties - be sure the company you
are becoming a partner in makes something that everybody wants.
36. Don't finance new inventions unless you are wealthy.
37. Ask who manages the company whose stock you want to buy.
38. Don't follow pool operations. The pools are out to get
you.
39. Don't listen to or give tips. Good tips are scarce and
they take a long time to materialize.
40. Don't take flyers.
41. Don't treat your losses lightly; they are serious. You
are losing actual currency.
42. When you win, don't get reckless; put your winnings in
the bank for a while.
43. Don't talk about the market - you will attract too much
idle gossip.
44. Sniff at inside information; it is usually bunk. The big
people don't talk about their operations.
45. Don't speculate unless you have plenty of time to think
about it.
46. Fortunes are not easily made in Wall Street. Some
professionals give their lives to the market and die poor.
47. There is such a thing as luck, but it does not hold all
the time.
48. Don't pyramid.
49. Don't average unless you are sure you know your stock.
50. Don't buy more stock than you can afford, just to look
big. If you a ten-share man, don't be ashamed of it.
51. Beware of a stock that is given an abundance of
publicity.
52. Use your mistakes as object lessons - the person who
makes the same mistake twice deserves no sympathy.
53. Don't open an account at the broker's just to oblige a
friend. Charity and speculation don't mix.
54. Remember that many people believe they can find better
use for your money than you can yourself.
55. Leave short selling to experienced professionals.
56. If you must sell short, pick a widely held stock or you
may get caught in a corner.
57. Money made easily in the market is never valued - easy
come, easy go.
58. Don't blame the Stock Exchange for your own mistakes.
59. Don't shape your financial policy on what your barber
advises - hundreds of experts are waiting to give you exact information.
60. Don't let emotion or prejudice warp your judgment. Base
your operations on facts.
From If You Must Speculate Learn the Rules, Frank J.
Williams, 1981, Fraser Publishing Company, extracted from Investment
Psychology Explained, Martin J. Pring, 1993, John Wiley & Sons.
William Gann's 28 golden rules
William Delbert Gann, a famous American trader (1878-1955), earned $50 million during the Great Depression. In 1933, he performed 479 trades - 422 of which were winners - which enabled him to achForex-central-videos-right-160x600ieve an overall gain of 4000%! He is credited with the design of a stock market forecasting system that is based more on dates than it is on prices.
Below are the rules... Anything in italic is a comment that I added and not a part of his original rules.
1) Never risk more than 10% of your trading capital in a single trade. (This is still pretty risky, I wouldn't ever recommend risking more than 5% of your capital on a single trade)
2) Always use stop-loss orders.
3) Never overtrade. (If you have 2 trades open, the total risk involved should not violate the first rule)
4) Never let a profit run into a loss. (As soon as you're making a profit, raise your stop so that you don't lose any money)
5) Don't enter a trade if you are unsure of the trend. Never trade against the trend.
6) When in doubt, get out, and don't get in when in doubt.
7) Only trade active markets. (And only trade liquid markets)
8) Distribute your risk equally among different markets. (It's better to have 3 small orders on 3 different currency pairs than 1 big order on 1 currency pair)
9) Never limit your orders. Trade at the market. (This means no buy limit or sell limit orders)
10) Don't close trades without a good reason.
11) Extra monies from successful trades should be placed in a separate account.
12) Never trade to scalp a profit. (You should only shoot for big profits, not small ones as one bad trade can wipe out lots of small winning trades)
13) Never average a loss. (Example: if you buy EUR/USD and it falls, don't buy more (in order to average out your average purchase price) because you could lose twice as much money now)
14) Never get out of the market because you have lost patience or get in because you are anxious from waiting.
15) Avoid taking small profits and large losses.
16) Never cancel a stop loss after you have placed the trade.
17) Avoid getting in and out of the market too often.
18) Be willing to make money from both sides of the market. (Your objective is to stay with the trend and make money. If the trend slows down, sell on rallies to buy back at a lower price).
19) Never buy or sell just because the price is low or high.
20) Be careful about pyramiding at the wrong time. Pyramiding should be only accomplished once it has crossed resistance levels and broken zones of support.
21) Pyramiding can be very profitable at the right time. Select commodities (or currency pairs) with a strong trend up when buying and with definite downtrend to sell short.
22) Never hedge a losing position. If you are long one commodity and it starts to go down, don't sell another commodity short to hedge it. Get out of the market. Take your loss and wait for another opportunity. (I personally trade using a very profitable forex hedging strategy! Hey, some rules were just meant to be broken!)
23) Never change your position without a good reason. When you make a trade, make it with good reason according to some definite rule. Then do not get out unless there is a definite indication of change in trend.
24) Avoid trading after long periods of success. You should maintain a disciplined, planned trading program.
25) Don't try to guess tops or bottoms. Let the market show you that it has genuinely made a top or bottom.
26) Don't follow a blind man's advice. (Only trust advice when you are 100% sure that this person's trading system works)
27) Reduce trading after the first loss; never increase.
28) Avoid getting in wrong and out wrong; or getting in right and out wrong. This is making a double mistake.
W.D. Gann's trading rules
W.D. Gann's trading rules emphasize capital preservation, disciplined trading, and trend adherence. Key rules include limiting risk to 10% of capital per trade, using stop-loss orders, avoiding overtrading, and never letting a profit turn into a loss. Gann also stressed trading with the trend, waiting for confirmation before entering a trade, and distributing risk across multiple markets.
Key Trading Rules:
- Capital Management: Risk only 10% of your trading capital on any single trade.
- Stop-Loss Orders: Always use stop-loss orders to limit potential losses.
- Trend Following: Never trade against the prevailing trend.
- Confirmation: Wait for confirmation before entering a trade.
- Risk Distribution: Spread your risk across different markets.
- Don't Overtrade: Manage the number of open positions to avoid excessive risk.
- Avoid Averaging Losses: Do not add to losing positions.
- Stay Flexible: Be willing to adapt your approach to changing market conditions.
Gann's Trading Techniques:
- Gann believed that price and time are intrinsically linked, and he developed tools like Gann angles and fans to analyze these relationships.
- Gann used angles, particularly 45-degree angles (1x1), to identify potential support and resistance levels.
- Gann also used Fibonacci retracements to identify potential areas where price might reverse.
- Gann identified various chart patterns, such as double tops and bottoms, that could signal potential trend reversals.
- Gann also considered volume as an important indicator, especially when combined with price action.
Gann's Rules for Discipline:
- Avoid Gambling: Treat trading as a business, not a gamble.
- Stay Calm: Avoid emotional trading decisions.
- Be Patient: Wait for the right opportunities and avoid impulsive trades.
- Review and Learn: Analyze your trades to identify areas for improvement.
W.D. Gann's Twenty-eight Rules
W.D. Gann's Twenty-eight Rules.
1. Amount of capital to use: Divide your capital into 10
equal parts and never risk more than one-tenth of your capital on any one
trade.
2. Use stop loss orders to protect trades.
3. Never overtrade. This would be violating your capital
rules.
4. Never let a profit run into a loss. Raise your stop loss
order level after price increases.
5. Do not buck the trend. Never buy or sell if you are not
sure of the trend according to your charts and rules.
6. When in doubt, get out, and don't get in when in doubt.
7. Trade only in active markets. Keep out of slow, dead
ones.
8. Equal distribution of risk. Trade in 2 or 3 different
commodities, if possible. Avoid tying up all your capital in any one commodity.
9. Never limit your orders or fix a buying or selling price.
Trade at the market.
10. Don't close your trades without a good reason. Follow up
with a stop loss order to protect your profits.
11. Accumulate a surplus. After you have made a series of
successful trades, put some money into a surplus account to be used only in
emergency or in times of panic.
12. Never buy or sell just to get a scalping profit.
13. Never average a loss. This is one of the worst mistakes
a trader can make.
14. Never get out of the market just because you have lost
patience or get into the market because you are anxious from waiting.
15. Avoid taking small profits and big losses.
16. Never cancel a stop loss order after you have placed it
at the time you make a trade.
17. Avoid getting in and out of the market too often.
18. Be just as willing to sell short as you are to buy. Let
your object be to keep with the trend and make money.
19. Never buy just because the price of a commodity is low
or sell short just because the price is high.
20. Be careful about pyramiding at the wrong time.
21. Select the commodities that show strong uptrend to
pyramid on the buying side and the ones that show definite downtrend to sell
short.
22. Never hedge. If you are long of one commodity and it
starts to go down, do not sell another commodity short to hedge it. Get out of
the market; take your loss and wait for another opportunity.
23. Never change your position in the market without a good
reason. When you make a trade, let it be for some good reason or according to
some definite rule; then do not get out without a definite indication of a
change in trend.
24. Avoid increasing your trading after a long period of
success or a period of profitable trades.
25. Don't guess when the market is top. Let the market prove
it is top. Don't guess when the market is bottom. Let the market prove it is
bottom. By following definite rules, you can do this.
26. Do not follow another man's advice unless you know that
he knows more than you do.
27. Reduce trading after first loss; never increase.
28. Avoid getting in wrong and out wrong; getting in right
and out wrong; this is making double mistakes.
From How to Make Profits Trading in Commodities, W.D.
Gann, 1976, Lambert-Gann Publishing, extracted from Investment Psychology
Explained, Martin J. Pring, 1993, John Wiley & Sons.
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.
Robert Meier's Eleven Rules
Robert Meier's Eleven Rules.
1. Ask yourself what you really want. Many traders lose
money because subconsciously their goal is entertainment, not profits.
2. Assume personal trade responsibility for all actions. A
defining trait of top performing traders is their willingness to assume
personal responsibility for all trading decisions.
3. Keep it simple and consistent. Most speculators follow
too many indicators and listen to so many different opinions that they are
overwhelmed into action. Few people realize that many of the greatest traders
of all time never rely on more than two or three core indicators and never
listen to the opinions of others.
4. Have realistic expectations. When expectations are too
high, it results in overtrading underfinanced positions, and very high levels
of greed and fear - making objective decision-making impossible.
5. Learn to wait. Most of the time for most speculators, it
is best to be out of the markets, unless you are in an option selling (writing)
program. Generally, the part-time speculator will only encounter six to ten
clear-cut major opportunities a year. These are the type of trades that savvy
professionals train themselves to wait for.
6. Clearly understand the risk / reward ratio. The consensus
is that trades with a one to three or one to four risk / reward ration are
sufficient.
7. Always check the big picture. Before making any trade,
check it against weekly and monthly as well as daily range charts. Frequently,
this extra step will identify major longer-term zones of support and resistance
that are not apparent on daily charts and that substantially change the
perceived risk / reward ratio. Point & figure charts are particularly
valuable in identifying breakouts from big congestion / accumulation
formations.
8. Always under-trade. It is easy to forget just how
powerful the leverage is in futures and options. It is not uncommon to find
speculators holding positions two or three times larger than is justified by
their account size. By consciously under-trading, that is taking positions much
smaller than you might be able to, you will gradually learn to hold back until
you find the real money-making opportunities and stay with major trends.
9. Define your broker relationship. A full-service commodity
broker can be a valuable ally, but should not be pushed into the position of
making your final decisions.
10. Never trade with serious personal problems. Ignoring
this rule is a prescription for disaster. The clarity of thought and emotional
control required even for part-time speculator is so great that it is
impossible to handle along with serious personal problems. Likewise, trading
should not be attempted during periods of ill health, even including a bad head
cold.
11. Ignore the news media. The true goals of the national
news media are to shock, agitate, entertain, and editorialize a socialist
agenda - not provide useful information. Many of the finest traders avoid all
contact with public news, knowing how profoundly it can undermine a trading
plan. The more important trading profits are to you, the less you can afford to
follow the "news."
From Investment Psychology Explained, Martin J. Pring,
1993, John Wiley & Sons.
Martin Pring's Nineteen Trading Rules for Greater Profits.
Martin Pring's Nineteen Trading Rules for Greater Profits.
1. When in doubt, stay out.
2. Never trade or invest based on hope.
3. Act on your own judgment or else absolutely and entirely
on the judgment of another.
4. Buy low (into weakness), sell high (into strength).
5. Don't overtrade.
6. After a successful and profitable campaign, take a
trading vacation.
7. Take a periodic mental inventory to see how you are
doing.
8. Constantly analyze your mistakes.
9. Don't jump the gun.
10. Don't try to call every market turn.
11. Never enter into a position without first establishing a
risk reward.
12. Cut losses, let profits run.
13. Place numerous small bets on low-risk ideas.
14. Look down, not up.
15. Never trade or invest more than you can reasonably
afford to lose.
16. Don't fight the trend.
17. Wherever possible, trade liquid markets.
18. Never meet a margin call.
19. If you are going to place a stop, put it at a logical,
not convenient, place.
20. Follow the other nineteen rules without question.
From Investment Psychology Explained, Martin J. Pring,
1993, John Wiley & Sons.
Dr. Thomas Wu
CAIA, FRM, PRM, CFA, CA, CPA (US), CPA AUSTRALIA, DBA, MBA, MPA
Dr. Wu has spent over ten years in an US-based investment bank and a Big Four accounting firm. His work ranged from auditing and recruiting to syndication, project finance, and acquisition financing in Canada, US, Singapore, and Hong Kong.
Dr. Wu has also managed a technology company and overseen an investment trust prior to obtaining his doctoral degree. Currently, Dr. Wu is a visiting Associate Professor at a university in China, a finance instructor and training coach at a Swiss-based private bank, and an instructor of accounting and CAIA exam prep courses in Kaplan. Dr. Wu has over 7 years of experience inteaching CAIA courses. He has been highly regarded by students as exam-oriented, successful in highlighting and explaining key concepts.
- Over 7 years of experience in teaching CAIA courses
- Spent over ten years in a US-based investment bank and a Big Four accounting firm
- His work ranged from auditing and recruiting to syndication, project finance, and acquisition financing in Canada, US, Singapore, and Hong Kong
- Managed a technology company and overseen an investment trust prior to obtaining his doctoral degree
- Exam-oriented, successful in highlighting and explaining key concepts
Victor Sperandeo's Nineteen Rules
Victor Sperandeo's 15 trading rules to avoid mistakes and achieve spectacular returns
By
Anupam Nagar
Synopsis
Victor Sperandeo is a legendary trader and excellent financial commentator with over 45 successful years of experience on Wall Street. He is the founder, CEO and President of Alpha Financial Technologies LLC and also a founding partner, CEO and President of EAM Partners L.P.
Market Wizard Victor Sperandeo says most investors make the mistake of thinking that market behavior is truly predictable and instead their objective should be to always keep the odds in their favor.
Sperandeo says investors should follow some investment rules to make trading choices as objective and consistent as humanly possible without which, investors can end up imposing their wishes on their investment decisions which can lead to huge losses in the long run.
Victor Sperandeo's Nineteen Rules
Victor Sperandeo's Nineteen Rules.
1. Trade with a plan and stick to it.
2. Trade with the trend. "The trend is your friend!"
3. Use stop loss orders whenever practical.
4. When in doubt, get out!
5. Be patient. Never overtrade.
6. Let your profits run; cut your losses short.
7. Never let a profit run into a loss. (Or always take a free position if you can.)
8. Buy weakness and sell strength. Be just as willing to sell as you are to buy.
9. Be an investor in the early stages of bull markets. Be a speculator in the latter stages of bull markets and in bear markets.
10. Never average a loss - don't add to a losing position.
11. Never buy just because the price is low. Never sell just because the price is high.
12. Trade only in liquid markets.
13. Never initiate a position in a fast market.
14. Don't trade on the basis of "tips." In other words, "trade with the trend, not your friend." Also, no matter how strongly you feel about a stock or other market, don't offer unsolicited tips or advice.
15. Always analyze your mistakes.
16. Beware of "Takeunders."
17. Never trade if your success depends on a good execution.
18. Always keep your own records of trades.
19. Know and follow the Rules!
From Trader Vic - Methods of a Wall Street Master, Victor Sperandeo with Sullivan Brown, 1991, John Wiley & Sons, extracted from Investment Psychology Explained, Martin J. Pring, 1993, John Wiley & Sons.
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