As you all know, the trading business is tough, challenging and humbling at times. It can be an emotional business for many, especially those that are new to trading. Over the years, I have continued to discover and learn new things about trading; so I’m forever a student of the business myself. Through my experience spanning over 20 years of trading for myself full time, I have learned that if I follow certain rules I dramatically increase the odds of finding winning trades. Every trader should create set up rules for every trade they take. They should then strictly follow these rules like a robot, this will help lead them to achieve success in this business we call trading.
Today, i’m going to share a simple rule with you that has made me millions over the past decades, I call it the ‘Good Samaritan Trader’. This one simple rule has helped me for over 20 years and if you adopt it I’m sure it will help you too.
Here is the rule: When everyone wants a stock so bad, give it too them (sell)! When everyone hates a stock so much you should help them out and take off their hands (buy). Basically, this rule is about selling stocks at extreme highs and buying stocks at extreme lows. I always tell traders that when everyone is on the same side of the boat (stock market) I want to be on the other side. Now please understand, this sounds simple, but it is not easy and is very difficult for most people. This will require a lot of understanding of chart reading and sentiment reading, but it is worth the investment to learn this specified knowledge.
The legendary investor, John Templeton, made a famous statement saying that bull markets are born on pessimism, grown on skepticism, mature on optimism and die on euphoria. This statement is one of my favorites and everyone in this business should commit it to memory. Everyone that is looking to be in the trading business must create a set of rules to follow and live by. Try the ‘Good Samaritan Trader’ rule and you will see how it will help you develop as a profitable trader.
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