Trading Center

10 Stock-Market Rules

Investing risk can be reduced using multiple diversification methods and tools.THE TOP 10 STOCK-MARKET RULES

1st Stock-Market Rule

“The Market is Unpredictable”

You can never predict the future, if you ever can, don’t waste your time investing in stocks and other financials.


2nd Stock-Market Rule

"Portfolio Diversification is Crucial"

Diversify heavily your portfolio. Diversification of risk is the only rule that is always valid in any form of investment. Diversify in terms of different companies, industries, countries, and currencies.


3rd Stock-Market Rule

"Smart-Money is Stronger in Short-Term Trades"

When you try to trade the market in short time periods (ie intraday), keep in mind that you compete with professional and trading-specialists (hedge funds, bank dealing rooms etc). These professionals form what is called Smart Money. Smart money can rarely be beaten by non-professional traders.


4th Stock-Market Rule

“Buy The Rumor & Sell the Fact”

Buy the rumor and sell the fact is a tactic widely used by professionals. Stock-market prices usually incorporate any good news long before they actually happen.


5th Stock-Market Rule

“Be Sure About the Quality of The Management”

Do not ever trust a company if you are not sure about the quality and consistency of its management.




“News is Already Incorporated in Prices”

Do not make decisions upon something you read in a newspaper, 90% of all news is already incorporated in share prices.

7th Stock-Market Rule

“Instinct Usually Misleads”

Do not make decisions only by following your instinct. Stock-market is a game based on mathematics and economic figures.


8th Stock-Market Rule

“Stock-Market Sudden Popularity Increase is a Sell Signal”

When everybody is talking about the stock market you must sell the stock market quickly.


9th Stock-Market Rule

"Overall Portfolio Risk Management Matters"

Always manage your buy/sell decisions according to your overall portfolio risk, not individually.


Technical Analysis

Valuating Stocks

Day-Trade Strategies

Investment Risk


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10th Stock-Market Rule

“A Bullish Market that is Expensive is more Secure than a Bearish Market that is Cheap”

Stock-Markets are always moving according to time patterns. Accept risks only during the bullish market cycle. A bull market that is expensive is more secure than a bear market that is cheap.


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Trading Center (2012)

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