Market hotspots change every day, stock prices fluctuate daily, yet the ancestors of stock trading have written down family precepts based on their experiences. These are principles that must be followed for survival and success. These principles were applicable 100 years ago, are applicable today, and will still be applicable 100 years from now because human nature never changes.
1. **Stop-loss, stop-loss, stop-loss!**
I don't know how to emphasize the importance of these two words, nor do I know how to explain them, but this is the highest behavioral guideline in stock trading. If you feel that you absolutely cannot sell your stocks at a price lower than your purchase price, then you'd better exit this industry immediately because you have no chance of survival here. One last painful cut, one last bitter experience, and you might still have a few bucks left to buy formula for your son.
2. **Diversify risks!**
This business requires taking stakes, but you should not become a gambler. If you seek thrills in this field, place large bets, and dream of getting rich quickly, then sooner or later, you will crash and say goodbye—much faster than you can imagine. You may have had 10 strokes of luck, but the 11th might not come your way. Remember: you can only take calculated risks; don't gamble away everything...