I love simple statements of market wisdom. It's probably because I'm a member of the sound bite generation and I can't absorb information unless it's packaged in sentences under 10 words. Or it could be that the most basic lessons we're taught over the years represent a schematic for profitable trading.
In any case, I've put together another list of trading maxims, truisms and platitudes. If you find these tidbits helpful, print them out and paste them near your trading screen. Then glance over and check out these gems the next time the market is beating you up.
It's more fun to swim with the fishes than be crushed by the waves. Most trends need support from the broader market and will fail without it.
A new trading door opens whenever an old one closes. Be the first one, not the last one, to find the new door.
Markets rarely reward the majority. Opportunity is a moving target that requires constant attention.
Perfection attracts attention, and the most obvious plays carry the greatest risk for failure.
The best trades come when the crowd leans the wrong way. In other words, the majority piles in one way but profits come from trading it the other way.
The most obvious short sales trigger the most violent squeezes. Find the less-traveled path if you want to sell the market.
Markets try to burn everyone before they launch definable trends. But they only punish one side at a time.
The Swing Shift The Midday Quiet Offers Opportunity 11/11/2004 12:00 PM EST Many traders unwisely ignore the action between 10:30 a.m. and 3 p.m. each day.
Alan Farley is a professional trader and author of The Master Swing Trader. Farley also runs a Web site called HardRightEdge.com, an online resource for trading education, technical analysis and short-term investment strategies. At the time of publication, Farley did not have any positions in any of the stocks mentioned in this article, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Farley appreciates your feedback and invites you to send it to Alan.Farley@TheStreet.com. Also, click here to sign up for Farley's premium subscription product The Daily Swing Trade brought to you exclusively by TheStreet.com.
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