At the beginning of the year, Barry Ritholtz published a list of Market Truisms and AxiomsÂ from Arthur Huprich. The full list is well worth reviewing, especially if you’re a stock market trader or investor. Here are the ones that I thought the most worthwhile.
Â – There is nothing new on Wall Street. There canâ€™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.
Â – Understanding mass psychology is just as important as understanding fundamentals and economics.
Â – Learn to take losses quickly, donâ€™t expect to be right all the time, and learn from your mistakes.
Â – When trading, remain objective. Donâ€™t have a preconceived idea or prejudice. Said another way, â€œthe great names in Trading all have the same trait: An ability to shift on a dime when the shifting time comes.â€
Â – Wishful thinking can be detrimental to your financial wealth.
– 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!