A “double-bottom” price pattern looks like the letter “W.” This pattern also doesn’t occur quite as often as the cup with handle, but it still occurs frequently. It is usually important that the second bottom of the W match the price level (low) of the first bottom or, as in almost all cases, clearly undercut it by one or two points, thereby creati

If you don’t sell early, you’ll be late. Your object is to make and take significant gains and not get excited, optimistic, greedy, or emotionally carried away as your stock’s advance gets stronger. Keep in mind the old saying: “Bulls make money and bears make money, but pigs get slaughtered.”

Be careful of selling on bad news or rumors; they may be of temporary influence. Rumors are sometimes started to scare individual investors—the little fish—out of their holdings.

following all of my selling rules had automatically forced me out of every stock. I was 100% in cash, with no idea the market was headed for a real crash that spring. This is the fascinating thing: the rules will force you out, but you don’t know how bad it can really get. You just know it’s going down and you’re out, which sooner or later will be

take 20% profits when you have them (except with the most powerful of all stocks) and cut your losses at a maximum of 8% below your purchase price.

The best stocks can have sharp sell-offs for a few days or a week. Consult a weekly basis stock chart for an overall perspective to avoid getting scared or shaken out in what may just be a normal pullback. In fact, 40% to 60% of the time, a winning stock may pull back to its exact buy point or slightly below and try to shake you out. But it should

A downswing of over 50% from a peak to a low means a stock must increase more than 100% from its low to get back to its high. Historical research shows stocks that make new price highs after such huge moves tend to fail 5% to 15% beyond their breakout prices.

stock downturns that exceed 2½ times the market averages are usually too wide and loose and must be regarded with suspicion.

So, I made an absolutely important exception to the “sell at +20% rule”: if the stock was so powerful that it vaulted 20% in only one, two, or three weeks, it must be held for at least eight weeks from its buy point.