General Trading Rules

1. Always be a student of the market. 
1. This is the easiest of all rules, because the moment you think you are a master, the market will punch you in the mouth and remind you that you are just a student...
2. When grading your trading ability, measure yourself in absolute percentage terms and not absolute dollar value. It's tempting to measure yourself in relative value, but in a down market it won't pay your bills.
3. Always learn from a losing trade. It's like paying tuition; if you paid an "ivy league caliber tuition" with the trade, make sure you get an "ivy league caliber education" from it.
4. People rarely call/time a multi-sigma event, so stop trying to find them. But if one is staring you in the face, it could be a fantastic opportunity.
2. Don't do anything stupid
1. Never short a bull market.
2. Shorts and "selling puts" have infinite loss potential
3. Know your trading tools, how to use them, and what the rules of the market are...
3. Think in fundamentals and seek out truths, then hold tight to them.
1. When it comes to your view of the markets, take your position but be prepared to change your mind instantly when the new information presents itself. Retail traders try to find confirmation of their theory while professional traders are always on the look-out for an alternate view.
2. The general trend can not be reversed by manipulation, although it can be assisted or muted, so watch the powers that be...
4. Trading is psychological
1. ABC: Always Be Calm.
2. Never, ever, ever trade on emotion, although your "gut" is a valued member of the investment committee.
3. Never take a trade home with you - when you lose $10 million, go home and live like you made $100 million.
4. When Fat Bastard steals your mojo, go to your baseline position - which may be 100% cash or your "conservative" portfolio
5. Light commitments are advisable when market position is not certain. If you are unsure, but really think you should hop on a trade, open a position (it can even be a single share) so you can start to focus on it. Clearly defined moves are signaled frequently enough to make life interesting and concentration on these moves will prevent unprofitable whip-sawing.
5. Life is about taking risks, risk mitigation, & "pot-odds".
1. Trade only if you anticipate likely gains being a multiple of expected loss potential. In taking a position, price orders are allowable, not market orders. 
2. Never leave a trade without an automated sale ("stop") - period! 
3. Stops are to be used to protect profits & limit losses. Stop orders are apt to be more valuable and less treacherous if used in proper relation to the chart formation.
4. Use a trading system that does not make your stop loss an open order visible to the markets since it will be used against you unless it violates any of the above rules.
5. In general, the most you can make shorting is 100%. When shorting, a decline from 50 to 25 will net only 50% profit, whereas an advance from 25 to 50 will net 100%.
6. A portion of your holdings will be cash all the time
1. If you're 100% invested, think again because you're "all-in" and have little to no dry powder to take advantage of another great oppportunity.
7. Ride profits.
1. Stops are to be used to protect profits. Stop orders are apt to be more valuable and less treacherous if used in proper relation to the chart formation.
2. In closing a position, use market orders.
8. Fundamentals, volume, and price volatility are as important as statistical reports.
9. Watch the herd
1. When in a state of low volume, watch and prepare to follow the price direction as volume increases.
2. acting immediately on a widespread public opinion even if correct, will usually delay the move.
3. Watch volume spikes for selling or buying, but also realize professionals hide their moves...
10. Seldom take a position in the direction of an immediately preceding three-day move. Wait for a one-day reversal.