Devoted to understanding the basics and fundamentals of investing

TRADING AXIOMS:
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On RISK:
If you are not worried, you are not risking enough.
Always play for meaningful stakes.
Resist the allure of diversification.

On GREED:
Always take your profit too soon.
Decide in advance what gain you want and when you get it, get out.

On HOPE:
When the ship starts to sink, don't pray; jump!
Accept small losses cheerfully and as a fact of life. Expect to experience several small losses while awaiting a large gain.

On FORECASTS:
Human behavior cannot be predicted. Distrust anyone who claims to know the future, however dimly.

On PATTERNS:
Chaos is not dangerous until it begins to look orderly.
Beware the Historian's Trap, the Chartist's Illusion, the Correlation, and the Gambler's Fallacy.

On MOBILITY:
Avoid putting down roots. They impede motion.
Do not become trapped in a souring venture because of sentiments like loyalty and nostalgia. Never hesitate to abandon any venture if something more attractive comes into view.

On INTUITION:
A hunch can be trusted if it can be clearly explained.
Never confuse a hunch with a hope.

On RELIGION & THE OCCULT:
It is rather unlikely that God's Devine Plan for the Universe includes making you rich. If astrology worked, all astrologers would be rich. A superstition need not be exorcised; it can be enjoyed, provided it is ignored when dealing with reality.

On OPTIMISM & CONFIDENCE:
Optimism means expecting the best, but confidence means knowing how you will handle the worst. Never make a move if you are merely optimistic. If in doubt, blow it out.

On CONSENSUS:
Disregard the majority opinion. It is quite probably wrong. Never follow speculative fads, but don't be afraid to speculate. Often the very best time to buy something is when nobody else wants it.

On STUBBORNNESS:
If it doesn't pay off the first time, blow it off and forget it. Never try to save a bad investment by "averaging or doubling down."

On PLANNING:
Long range plans engender the dangerous belief that the future is under some sembelance of control. Never take seriously the long range plans of others or yourself. Shun all long-term
investments.

FOUR ABSOLUTE SYSTEM TRADING LAWS:
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1. NEVER OVER TRADE!
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To take an interest larger than the capital justifies is to invite disaster. With such an interest, a fluctuation in the market unnerves the operator, and his judgment becomes worthless.

2. NEVER DOUBLE REVERSE!
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That is, never completely and at once reverse a position. Being long for instance, do not sell out and sell as much short all at once. This may occasionally succeed, but it is very hazardous, for should the market begin again to advance, the mind reverts to its original position and the speculator covers up and goes long again! Should this last change be wrong, complete demoralization ensues. The change in the original position should be made moderately, cautiously, thus keeping one's judgment clear and preserving the balance of one's mind.

3. RUN QUICKLY OR NOT AT ALL!
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That is to say, act promptly at the first approach of danger, but failing to do this until others see the danger, hold on or close out part of the interest.

4. WHEN DOUBTFUL, REDUCE INTEREST!
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Either one's mind is not satisfied with the position taken, or the interest is too large for safety. One man told another that he could not sleep on account of his position in the market. His friend judiciously and laconically replied, "Sell down to the sleeping point."

ELEVEN GENERAL TRADING RULES:
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1. Beware of acting immediately on widespread public opinion. Even if correct, it will usually delay the move.

2. From a period of dullness and inactivity, watch for and prepare to follow a move in the direction in which volume increases.

3. Limit losses, ride profits -- irrespective of all other rules.

4. Light commitments are advisable when a market position is not certain. Clearly defined moves are signaled frequently enough to make life pretty interesting, and concentration on these moves to the virtual exclusion of others will prevent unprofitable "whipsawing."

5. Seldom take a position in the direction of an immediately preceding three-day move. Wait for a one-day reversal.

6. Judicious use of stop orders is a valuable aid to profitable trading. Stops may be used to protect profits, to limit loses, and to take positions from certain formations such as triangular foci. Stop orders are apt to be more valuable and less treacherous if used in proper relation to the prevailing chart formation.

7. In a market in which upswings are likely to equal or exceed downswings, a heavier position should be taken for the upswings, for percentage reasons:
i.e., a decline from 50 to 25 will net only a 50% profit, whereas an advance from 25 to 50 will net a 100% profit.

8. In taking a position, price orders are allowable. In closing a position, use "market" orders.

9. Buy strong acting, strong background commodities and sell weak ones, subject to all other rules.

10. Moves in which rails and utilities lead or participate strongly are usually worth following more than moves in which rails and utilities lag.

11. A study of the capitalization of a company, the degree of activity of an issue, and whether the issue is a lethargic truck horse or a spirited, volatile race horse is fully as important as a study of the statistical reports.