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RealMoney.com: The Swing Shift
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25 Pearls of Wisdom for Traders
Page 2



  • Market direction is only as strong as the leadership that guides it. Stocks play follow-the-leader even when the charts tell a different tale.

  • You think you're too late when stumbling across a breakout or breakdown. In fact, you're probably too early.

  • Some opportunities evolve with textbook perfection, while others show no regard for your expert opinion.

  • Follow the professionals in quiet times and the public in wild times.

  • Anticipate direction instead of reacting to it. Enter the market before it moves, and let the crowd carry your position into a profit.

  • Don't trade when you can't measure your risk, and stand aside when you can't find your edge.

  • The safest course builds trading skills one step at a time and acts defensively when things go wrong.

  • Find an original view of the markets and trade it ruthlessly. Cookbook strategies and generic stop-losses don't work.

  • Don't trust others' opinions. It's your money at stake, not theirs.

  • Don't try to get even, because this isn't a game of catch-up. Take profits and losses with composure, and the next trade with absolute discipline.

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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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