I stumbled upon a post from Barry Ritholtz with a list of market truisms from Arthur Huprich.
First, a little background on Arthur. For years he was Raymond James Chief Market Technician and he currently serves in the same capacity at Day Hagan Asset Management.
This list is one of the best I’ve come across for technical traders and technicians alike. Here are a few of my favorites
- There is nothing new on Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again, mostly due to human nature.
- We can’t control the stock market. The very best we can do is to try to understand what the stock market is trying to tell us.
- Any dead fish can go with the flow. Yet, it takes a strong fish to swim against the flow. In other words, what seems “hard” at the time is usually, over time, right.
- Even the best looking chart can fall apart for no apparent reason. Thus, never fall in love with a position but instead remain vigilant in managing risk and expectations. Use volume as a confirming guidepost.
- Human emotion is a big enemy of the average investor and trader. Be patient and unemotional. There are periods where traders don’t need to trade.
- Wishful thinking can be detrimental to your financial wealth.
- Said another way, “It’s not the ones that you sell that keep going up that matter. It’s the one that you don’t sell that keeps going down that does.”
- The table below depicts the percentage gain necessary to get back even, after a certain percentage loss.
- To the best of your ability, try to keep your priorities in line. Don’t let the “greed factor” that Wall Street can generate outweigh other just as important areas of your life. Balance the physical, mental, spiritual, relational, and financial needs of life.
- Technical analysis is a windsock, not a crystal ball. It is a skill that improves with experience and study. Always be a student, there is always someone smarter than you!
Trade ’em well!