If you’re a growth investor you should know that this is a treacherous game. Although growth stocks can deliver powerful gains of 100% – 1,000% and more, they also eventually lose over 70% of their value on average!
You need to know how to protect your gains or you could be crushed. The following rules may be the most important stock market information you will ever read. Print and commit them to memory.
# 1 – THE MOST IMPORTANT RULE
Sell immediately if your stock falls 7- 8% below your purchase price. NO EXCUSES !
Don’t even think about investing in growth stocks if you can’t follow this rule. We give you the proper stop loss target for each of our stock picks. We suggest entering an automatic stop loss with each purchase unless you are a very experienced trader.
# 2 – YOU CAN “TIME” THE MARKETS
Hold stocks only when the overall trend of the market is up. It’s very hard to make money when the market is not acting well – so just get out.
We will teach you our proven market timing system that would have kept you out of stocks during the 2000 “tech wreck” and the 1929 crash!
3 out of 4 stocks follow the general market trend! You DO NOT have to be in the market all the time.
“The stock market generally goes up 1/3 of the time, down 1/3 of the time, and sideways 1/3 of the time.”— Jesse Livermore
By reading our daily Market Updates you will always be “in tune” with the market. By avoiding severe market downturns your investing results should materially improve.
# 3 – STOCKS MAKING “NEW HIGHS” TEND TO GO HIGHER!
In other words don’t “buy low and sell high, buy high and sell higher.” This goes against our basic human nature. We tend to think if something is selling at a lower price than before, it’s a bargain. Not in the stock market. “Bottom-fishing” is a sure way to lose money. Our technical buy rules only lead us to the strongest stocks at or near new 52 week price highs.
# 4 – BUY ONLY THE BEST STOCKS IN THE TOP GROUPS
Concentrate on the top 2 or 3 stocks from the top Industry Groups. “Best of breed” stocks will make you the most money. The group leaders usually make the biggest moves, while the “also rans” barely budge. “The key groups lead the market up and down” — Jesse Livermore
# 5 – BUY ON FUNDAMENTALS AND TECHNICALS ( but always Sell on technicals)
Buy only stocks with the best fundamentals coming out of solid price structures. Be patient and wait for proper set-ups to form . Only enter trades with the “wind at your back.” We monitor the markets daily looking for the handful of superior stocks that meet our exacting standards. We do the work so you don’t have to.
#6 – NEVER FOLLOW A STOCK TIP
Listen to the market and individual stocks – not the “experts” or your friends. Our stock picking system is based on how the markets really work, not on rumors or advice from the many TV, radio, internet, and newspaper pundits. We use many of the same rules and principles developed by the world’s greatest traders. Rules that have stood the test of time. Very little changes in the stock market over the years because basic human nature never changes.
#7 – DEFENSE IS MOST of the GAME
Growth stocks typically correct 70% or more from their highs and can devastate your portfolio. “The leaders of the current bull market are typically the losers of the next.” — William J. O’Neil. You must learn and commit to memory solid sell rules to protect your hard earned gains or they could be wiped out.
THIS WORKS!
You will be directed toward “life changing” young companies in vigorous infant industries that have great earning and fundamentals, and that are setting up for a “big volume” move out of a solid consolidation pattern after a previous big move.
We live in fantastic time of innovation and prosperity. Incredible opportunities happen every year in America. We wish you unlimited success!
Tags: lessons, online trading, rules, stock tips, stock trading
