Baruch listed his ten rules of trading in his autobiography Bernard Baruch: My Own Story. Baruch made his first million by the age of 35. He then went on to be a counsel for several Presidents. He states that he was skeptical about the usefulness of advice and was therefore reluctant to lay down any hard and fast rules. He offered the following as some points learned from his personal experience that might be worth considering from those ones who are able to master self-discipline. I will enlist them in the order he gave them in his book:
- Don’t speculate unless you can make it a full-time job.
- Beware of barbers, beauticians, waiters- of anyone- bringing gifts of “inside” information or “tips”.
- Before you buy a security, find out everything you can about the company, its management and competitors, its earnings and possibilities for growth.
- Don’t try to buy at the bottom and sell at the top. This can’t be done — except by liars.
- Learn how to take your losses quickly and cleanly. Don’t expect to be right all the time. If you have made a mistake, cut your losses as quickly as possible.
- Don’t buy too many different securities. Better have only a few investments which can be watched.
- Make a periodic reappraisal of all your investments to see whether changing developments have altered their prospects.
- Study your tax position to know when you can sell to greatest advantage.
- Always keep a good part of your capital in a cash reserve. Never invest all your funds.
- Don’t try to be a jack of all investments. Stick to the field you know best.
I hope the above rules could be helpful for the ones of you that are still lacking discipline in trading. I still find them extremely relevant and believe that they are a great piece of trading/investment wisdom.
This material is written for educational purposes only. By no means do any of its contents recommend, advocate or urge the buying, selling or holding of any financial instrument whatsoever. Trading and Investing involves high levels of risk. The author expresses personal opinions and will not assume any responsibility whatsoever for the actions of the reader. The author may or may not have positions in Financial Instruments discussed in this newsletter. Future results can be dramatically different from the opinions expressed herein. Past performance does not guarantee future results.
Editors’ Picks
AUD/USD pressures as Fed officials hold firm on rate policy
The Australian Dollar is on the defensive against the US Dollar, as Friday’s Asian session commences. On Thursday, the antipodean clocked losses of 0.21% against its counterpart, driven by Fed officials emphasizing they’re in no rush to ease policy. The AUD/USD trades around 0.6419.
EUR/USD extends its downside below 1.0650 on hawkish Fed remarks
The EUR/USD extends its downside around 1.0640 after retreating from weekly peaks of 1.0690 on Friday during the early Asian session. The hawkish comments from Federal Reserve officials provide some support to the US Dollar.
Gold price edges higher on risk-off mood hawkish Fed signals
Gold prices advanced late in the North American session on Thursday, underpinned by heightened geopolitical risks involving Iran and Israel. Federal Reserve officials delivered hawkish messages, triggering a jump in US Treasury yields, which boosted the Greenback.
Runes likely to have massive support after BRC-20 and Ordinals frenzy
With all eyes peeled on the halving, Bitcoin is the center of attention in the market. The pioneer cryptocurrency has had three narratives this year already, starting with the spot BTC exchange-traded funds, the recent all-time high of $73,777, and now the halving.
Billowing clouds of apprehension
Thursday marked the fifth consecutive session of decline for US stocks as optimism regarding multiple interest rate cuts by the Federal Reserve waned. The downturn in sentiment can be attributed to robust economic data releases, prompting traders to adjust their expectations for multiple rate cuts this year.
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