Trading Rules

FIVE STAR Swing Trade Rules:

 

Do’s

  1. Align all the trades with overall market direction. Long stocks in a bull market, Short stocks in a bear market.

  2. ONLY BUY on pull back of a stock.

  3. ONLY BUY a stock on an uptrend.

  4. Limit your loss with a STOP LOSS order.

  5. TAKE Partial Profits or Fast money profits.

  6. Trade Only Active markets and stocks.

  7. Preserve your capital is the most important thing.

  8. It is better to trade a stock which is at the beginning of the uptrend, not near the end.

 

Don’ts

  1. Never chase a stock, be patient and wait for a pull back.

  2. Never try to guess a bottom of a stock.

  3. Avoid illiquid stocks with low volume.

  4. Never put all your eggs in a basket.

  5. Never exceed more than 10% of your capital in a stock.

  6. When you are wrong, take your loss as soon as possible. Don’t sit and wait.