This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Ten Commandments of Trading:  1  |  2  |  3  |  4  |  5  |  6  |  7  |  8  |  9  |  10 



Don't Trade Off Only the Headlines



Commandment 9

If I didn't know any better, I would think that headlines are written to pick off errant traders who don't know enough. Watch tonight, watch when Intel (INTC - news) reports. I guarantee you that whatever headline is written for the competing wire services, it won't tell you what to do. If anything, it will throw you off the scent.

That's because the headline writer's job is antithetical to the process of investing and trading. You trade when you have knowledge of outlook, but the outlook comes out after the raw number, which isn't enough to trade on.

That's why I always say (and why my ninth Commandment of Trading is):


Don't trade headlines.


Wait for the story. Believe me, you will rarely, if ever, make money if you do nothing but react to the headline.

How bad can it be? Consider Apple (AAPL - news). I think that, looking back on the headlines after that company reported, you most definitely would have taken stock rather than sold it, because the headline was written with insufficient information.

Wait for the story. Don't trade the headline. Resist the quick trigger. You will do much better and generate far more winning trades this way.

Random musings: Don't forget, I'll be signing copies of my new book, Jim Cramer's Real Money, at Borders bookstore this Thursday, April 21, at noon. I want to see you in downtown New York, at 100 Broadway — right around the corner from Wall Street. Should be terrific!




Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free


Chart of I:DJI
DOW 17,673.04 -77.87 -0.44%
S&P 500 2,051.56 -11.81 -0.57%
NASDAQ 4,732.1470 -31.0770 -0.65%