How to Make Money in Stocks: A Winning System in Good Times and Bad, Fourth Edition

Therefore, you should apply your CAN SLIM system and select the best possible stock at the best possible time.

Keep your portfolio clean and in sync with the market. Remember, good gardeners always weed the flower patch and prune weak stems.

If an option fluctuates three times as rapidly as the underlying stock, then perhaps 20% or 25% might be a possible absolute limit. On the profit side, you might consider adopting a rule that you’ll take many of your gains when they hit 50% to 75%.

At the same time, sell and eliminate stocks that start to show losses before they become big losses.

Most people with $20,000 to $200,000 to invest should consider limiting themselves to four or five carefully chosen stocks they know and understand. Once you own five stocks and a tempting situation comes along that you want to buy, you should muster the discipline to sell your least attractive investment. If you have $5,000 to $20,000 to invest, t

The winning investor’s objective should be to have one or two big winners rather than dozens of very small profits. It’s much better to have a number of small losses and a few very big profits.

The more you diversify, the less you know about any one area. Many investors overdiversify. The best results are usually achieved through concentration, by putting your eggs in a few baskets that you know well and watching them very carefully.

You can’t become a big winner in the stock market until you learn to be a good seller as well as a good buyer. Readers who followed these historically proven sell rules during 2000 nailed down most of the substantial gains they made in 1998 and 1999. A few serious students made 500% or more during that fast-moving period. Again in 2008, an even gre

“It never is your thinking that makes big money,” said Livermore. “It’s the sitting.” Investors who can be right and sit tight are rare. It takes time for a stock to make a large gain.