Thread by @VRtrendfollower

Top 10 Golden Rules for Trading by Dan Zanger.

#Thread

1.) Make sure the stock has a well formed base or pattern.

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2. Buy the stock as it moves over the trend line of that base or pattern & make sure that volume is abv recent trend shortly after this "breakout" occurs. Never pay up by more than 5% abv the trend line. U should also get to know ur stock's thirty day moving average volume.

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3.) Be very quick to sell your stock should it return back under the trend line or breakout point. Usually stops should be set about $1 below the breakout point. The more expensive the stock, the more leeway you can give it, but never have more than a $2 stop loss.

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Some people employ a 5% stop loss rule. This may mean selling a stock that just tried to breakout & fails in 20 minutes or 3 hrs from the time it just broke out abv ur purchase price.

4. Sell 20 to 30% of ur position as the stock moves up 15 to 20% from its breakout point.

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5.) Hold your strongest stocks the longest and sell stocks that stop moving up or are acting sluggish quickly. Remember stocks are only good when they are moving up.

6.) Identify and follow strong groups of stocks and try to keep your selections in these groups.

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7.) After the market has moved for a substantial period of time, your stocks will become vulnerable to a sell off, which can happen so fast and hard you won't believe it. Learn to set new higher trend lines and learn reversal patterns to help your exit of stocks.

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8.) Remember it takes volume to move stocks, so start getting to know your stock's volume behavior and then how it reacts to spikes in volume. You can see these spikes on any chart. Volume is the key to your stock's movement and success or failure.

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9.) Many stocks are mentioned in the newsletter with buy points. However just because it's mentioned with a buy point does not mean it's an outright buy when a buy point is touched. One must first see the action in the stock and combine it with its volume for the day.

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10.) Never go on margin until you have mastered the market, charts and your emotions.

MARGIN CAN WIPE YOU OUT.