Cramer's 'Mad Money' Recap: Tools of Cramer's Trade

Sell on Slowing Growth

Wall Street doesn't like decelerating growth, and growth funds tend to lighten up their positions when they see growth decelerating. "When you see the growth start to slow, you should sell," Cramer said.

"Even if you think the stock goes higher after the decline brought about by the deceleration, you should still sell beforehand and buy back shares later to sidestep the pain," he said.

The next method Cramer talked about was buying with "wide scales" on the way down. This method, he explained, is what he used at his hedge fund to buy declining stocks that he thought were nearing their bottoms.

Because it's "nearly impossible" to call an actual bottom in an individual stock, "the smart move is to buy incrementally on the way down," Cramer said.

With wide scales, people buy larger and larger positions as the stock goes lower, and "when it's so low you can hardly believe how poorly the stock is trading, you double down," he said.

But, he said, "be sure to leave yourself room, because when the stock bottoms, you're going to want to pour your money in."

While it's nearly impossible to call an actual bottom in a stock, there are signs that can help people know when the time is right to really "bulk up" a position, Cramer said.

Doubling Down

First, most, if not all, of the analysts who follow the stock have to downgrade it to sell, even though it's already been through a "sickening" decline.

Also, when a company gets hit with bad news or a negative rumor and the stock doesn't actually go down, it's a great sign that the stock has bottomed and that it's time to double down, he added.