5 Rules You Must Follow to Make Money in Any Market

Rule One:
Never Trade Just to Trade.
Having an itchy trigger finger can turn a trader into his own worst enemy. This is a classic mistake. We've all made it. I may even go so far as to say that this is what I see as the most common mistake among professionals AND non-pros.

Savvy traders know that there are times when the best action is to take no action. I never wake up one day and say, "Okay, I need to find a good play. I'm going to pore over a list of good stocks and pick my favorite one. I know that it is best to first get a good feel for exactly the way the stock trades before considering it as a profit opportunity.

We don't think that a trader who does such a thing can have a good enough feel for the stock's price action, or for the other major players who are controlling the stock's price movement. The savviest players on Wall Street know several great companies for months or years before buying the stock.

Rule Two:
Only Buy When Both the Fundamentals and the Technicals Tell You to Buy.
There are two stars that must be aligned: Technical and fundamental. If I purchase a stock, it is because the situation is such that a smart technical analyst and a smart fundamental analyst would both agree that the time to buy is NOW.

Generally, once I know that the company is well positioned from a financial standpoint, I then make sure that I have a good understanding of what the charts are telling us. Then I get more detailed by checking who the major buyers, sellers and current shareholders are, evaluating their reputation and whether new major shareholders are entering the picture.

Rule Three:
Never be Greedy; Small Profits Never Hurt Anybody.
As long as I am profitable, I am happy. Remember, I only swing at the pitches that I love. I only stick with a position because I think it has strong potential. I never stick with a trade because I have not yet achieved the profit that I want.

The market doesn't owe us anything! If anything, Mr. Market owes me a couple of losses. I never look a gift horse in the mouth. Waiting for the profit that you feel is owed to you is another classic emotional mistake and an emotion that makes a trader his/her own worst enemy.

It's just like holding a stock because you are down 5%, and you only want to sell at a profit or at break even. Mr. Market doesn't know you and doesn't care what you paid for the stock.

I make moves strictly based on what the indicators are telling me. NEVER based on the price of the stock.

If I moved based on stock price alone, I would never hold a stock for a 500% increase.

Rule Four:
Welcome Unsuccessful Trades.
What the heck is this guy talking about? Don't worry, this is not the "go down with the ship" philosophy.

My rules are simple. They are what has built fortune after fortune for myself and my clients, so listen to me here: I might limit my downside to 7% or I might cut my losses at 20%. Very often, I hedge my stock positions with stock option contracts that limit my downside to a few percentage points.

My stock screening system usually keeps me from buying stocks that get crushed. Okay, I know that you can't guarantee that a stock won't take a beating here and there. And when I'm trading options, we take an occasional beating. But if I'm right more than I'm wrong, and I make a lot more than I lose, then I've achieved my goal.

Some of the biggest winners that I have had - ones that have traded thousands of percentage points higher - have traded lower first. If I hadn't run them through my stock screening system, I would have limited my losses to 7% and, therefore, missed those winners that mean the world to your overall portfolio.

Rule Five:
Whenever Possible, Utilize Options as a Way to Generate Income in a Flat Market.
You can take in additional income every month by selling covered calls.

Every month there are ways to have from 1.5% - 7% of the value of your stock positions either deposited into your account, or sent to your home in the form of a check.

Every single month, so many investors leave an absurd amount of money on the table. The worst part about it is that the only reason they don't pick the found money up off of the ground, is that they don't have eyes that have the ability to see it. My heart goes out to those people who don't understand this simple strategy, just as it does to people who literally have vision problems. It's simple, really, and all that you have to do is take a few hours to understand it. IT'S WORTH IT!

5 Rules to Become a "Trading Monk"

Tell me if this is you:

1. You work very hard at your “day job”.

2. You can’t stand your boss and most of your co-workers.

3. Your job doesn’t pay you enough.

4. You don’t get the respect that you deserve at work.

5. You see stupid people who have more money than you do.

6. You experience road rage regularly.

7. The only vacation that you are familiar with is a working one.

8. You are uncertain about what to do to make more money.

9. You are skeptical about most things.

10. You wish that you could just “get away” sometimes (e.g. move to Alaska).


Take a deep breath and think about becoming a “trading monk”. Let me first define what a monk is:

“A man who is a member of a brotherhood living in a monastery and devoted to a discipline prescribed by his order: a Carthusian monk; a Buddhist monk.”

Let’s take a look at what a potential trading monk may look like.

You don’t have to become a serious monk to make money trading, but you do need to develop a certain mind set in order to take your trading/investing game to another level.

Things to work on:

1. Make learning about investing and trading part of your life.

It’s just like trying to lose weight; it has to be a part of your lifestyle. When you're on a diet, you may take the stairs instead of the elevator, park your car far away from work so that you have a further distance to walk, etc.

You should make learning about trading and investing a part of your life. Start slow and work your way up. Bring a book on investing with you while you’re waiting in the doctor’s office, etc.

2. “It’s the economy, stupid.”

I am actually shocked at how weak many traders and investors are when it comes to the economy. Take the time to learn economics and what the statistics mean, and you will have a competitive advantage over others in the market that are competing with you to make money. The economy will reveal to you when, where, and how to play the market.

3. Paper trade first.

Before you start to bet real money, practice paper trading first. It’s like taking practice exams before you take the real thing. Believe me: You would rather make your mistakes with fake money first.

4. Get comfortable with a handful of securities.

Find a handful of stocks and get to know them intimately (like the back of your hand). Each stock has its own unique character. Find out the “character” of a handful (e.g. five) good name companies and watch them for several weeks or months (depending on your personality) before you bet real money on them.

5. Get in there and trade.

Once you feel comfortable, get in there and trade. Just remember to crawl before you walk, and to walk before you run.

In closing...

I speak with people on a regular basis who try to invest and trade on their own, lose money because they went about it the wrong way, and eventually just throw in the towel and give up. THIS DOES NOT HAVE TO BE YOU!

To be good at anything, it takes practice, dedication, and hard work. If you don’t want to put that effort in then throw in the towel right now, hand your money over to a “professional”, and get ready to receive mediocre returns and retire when you are about 90.

The choice is yours. Do it the “right way” or don’t do it at all.

Drink Coffee to Keep Alzheimer & Cancer at bay!

Alzheimer's? Just take a cuppa coffee

A cup of coffee daily can help you in more ways than you think. For example, the daily dose of caffeine can keep Alzheimer's disease at bay

New York: A daily dose of caffeine blocks the disruptive effects of high cholesterol that scientists link with Alzheimer's disease.

Caffeine equivalent of just a daily cup of coffee could protect the blood-brain barrier (BBB) from damage that occurs with a high-fat diet, according to a study.

The BBB protects the central nervous system (CNS) from the rest of the body's circulation, providing the brain with its own regulated microenvironment.

Previous studies have shown that high levels of cholesterol break down the BBB that can then no longer protect the CNS from the damage caused by blood borne contamination. BBB leakage occurs in a variety of neurological disorders such as Alzheimer's disease.

In this study, researchers of University of North Dakota (UND) gave rabbits three mg caffeine daily or the equivalent of an average daily cup of coffee. The rabbits were fed a cholesterol-enriched diet during this time.

After 12 weeks a number of lab tests showed that the BBB was significantly more intact in rabbits receiving a daily dose of caffeine.

Findings of the study have been published in the open access Journal of Neuroinflammation.

"Caffeine appears to block several of the disruptive effects of cholesterol that make the blood-brain barrier leaky," says Jonathan Geige of UND.

"High levels of cholesterol are a risk factor for Alzheimer's disease, perhaps by compromising the protective nature of the blood-brain barrier. For the first time we have shown that chronic ingestion of caffeine protects the BBB from cholesterol-induced leakage.

"Caffeine is a safe and readily available drug and its ability to stabilise the blood-brain barrier means it could have an important part to play in therapies against neurological disorders."







Drink coffee to keep cancer at bay

Now medical scientists say that drinking three cups of coffee a day can also cut risk of ovarian cancer

London: Caffeine may not be good for to-be-moms as it increases the risk of miscarriage. But a new study has found that drinking three cups of coffee daily can help prevent ovarian cancer in women.

A team of international researchers has carried out the study and found that women who take caffeine equivalent to three cups of coffee everyday are less likely to develop ovarian cancer later in life.

"We observed a significant inverse trend of ovarian cancer risk with caffeine intake. The reasons why caffeine protects against ovarian cancer is not clear and further studies will be carried out," lead researcher Shelley Tworoger of Harvard Medical School wrote in the 'Cancer' journal.

The team came to the conclusion after analysing the effects of coffee intake on a group of nurses. The researchers compared the diets of 80,000 of these women with the incidence of ovarian cancer as part of the study between 1976 and 2004.

According to the researchers, 737 of them developed ovarian cancer during the study period.

Those who had at least three cups of coffee a day were found to be 20 per cent less likely to develop the disease than those who drank none. Moreover, those who did not opt for hormone replacement therapy, the risk was 43 per cent less.

However, the benefits and risks of drinking coffee continue to be the subject of much debate.

"The jury is still out as to whether or not caffeine affects the risk of ovarian cancer because evidence from previous studies looking at this link has been inconsistent," the 'Daily Mail' quoted Josephine Querido of Cancer Research UK as saying.

Ref: Indo-Asian News Service