Jay’s Trading Maxim #201: It is OK to make all the predictions you’d like regarding the financial markets. Just don’t be stupid enough to risk a lot of money thinking that you’ll be right (more succinctly: Predicting the future is really hard).
Jay’ Trading Maxim #202: There is an incredibly fine line between courage and stupidity. Approach that line with caution.
(See also Jay’s Trading Maxim’s (Part 1))
(See also Jay’s Trading Maxim’s (Part 2))
Jay’s Trading Maxim #206: When you find yourself becoming quite pleased and comfortable with the way things are flowing, beware the ebb.
Jay’s Trading Maxim #212a: If you’ve made the decision to “go for the gusto”, then for crying out loud man, just go for the gusto.
And the all important addendum…
Jay’s Trading Maxim #213b: “Gusto” ain’t always all it’s cracked up to be. So if you’ve made the decision to “go for the gusto”, remember not to lose your shirt in the process.
Jay’s Trading Maxim #292: There is a difference between picking a bottom and recognizing a potential opportunity.
Jay’s Trading Maxim #293: Most truly great buying opportunities do not look anything at all like truly great buying opportunities at the time they are truly great buying opportunities. In fact, they typically look like just the opposite.
Jay’s Trading Maxim #306: Human nature can be a detriment to trading success and should be avoided as much as humanly possible.
Jay’s Trading Maxim #306a: The Elliott Wave count can be an extremely valuable market timing tool. Especially when it works.
See also One Way to Play a Spike in SPY Volatility)
Jay Trading Maxim #306b: If you want to know how useful Elliott Wave theory is, just go and ask any Elliott Wave theoretician (but maybe bring a sandwich because you might be there a while).
Jay’s Trading Maxim #312: “There are exceptions to every rule.” (OK, I’m pretty sure I picked this one up from someplace else, but still, you’ve got to admit that it’s got some merit).
Jay’s Trading Maxim #321: Refusing to employ some sort of stop-loss mechanism so as not to interfere with a given trading system’s performance is perfectly acceptable – right up until the time that – tragically – it is not.
(See also This is What a Classic Bottom Formation Looks Like (Maybe?))
Jay’s Trading Maxim #372: What goes up may eventually go down – but it might also continue to go up and maybe a lot more than you expect and for a really long time. So learn to follow trends and establish objective exit criteria.
Jay’s Trading Maxim #373: What goes down may or may not eventually go back up – but it will probably bounce, at least every once in a while.
As it turns out Trading Maxim #373 is much more useful when applied to physical commodities than to individual stocks, for as we know, the price of a stock can in fact go to zero. Virtually any physical commodity – no matter how much in abundance it may be – will maintain a price level somewhere north of zero.
