Stock Market Lessons: Part III

In the 2007 membership survey, I asked the following question: "What did you learn from your best and worst trade or investment in 2006?" Here are the replies I received:

• Don't put all your eggs in one basket


• Sometimes discipline works against you in the short run


• I can't watch the market as closely as a pro therefore I should participate more conservatively


• Use more than one confirmation indicator


• Don't hold stocks whose management is stingy with information


• I can't be right all the time


• Trying to time the market is a fool's errand


• Know the float


• Buying on impulse usually doesn't pay


• Experts are not always right


• Don't hold trades through earnings


• Have a plan, know why you own a stock and under what conditions you will sell it


• Don't fall in love with any stock


• Check your ego at the door


• Shorting requires excellent timing and ability to withstand pain for quite a while


• Don't turn a trade into an investment


• Use longer charts more often


• Losers average losers


• Sell at 25% increases and buy at 10% decreases in the NASDAQ


• Don't let the fear of missing control you


• Take full responsibility for both good and bad trades


• When dogs go rise in price they are still dogs


• Logic has nothing to do with what the market may do in the short run


• I need to learn more about myself and develop my niche


• Never double up when trade is going the wrong way


• Move into new positions slowly


• When doing battle with crooks, hedge your bet


• I am not right if the market disagrees with me


• Euphoria over gains is the most powerful poison in trading and investing


• Even playing it safe can cost you


• Take your losses quickly and your winners slowly


• Always have some extra cash in reserve


• Tips are useless


• Stick to your guns - this is a long-term game


• Follow the chart, not the hype


• Momentum can last a long time but can stop in a heartbeat


• I'm not smarter than the market


• Consider the downside of any investment first


• Go to Vegas if you want to gamble


• No matter how much or little you make - share your profits with the needy

If you haven't already read them, here is Part I and Part II.