- Big moves usually don’t happen in a day, be patient
- Don’t fight the market
- Consider not jumping in or out all at once—no matter which way the market goes there will be something good to be said about it (e.g., at least I got half out…)
- Regardless of the market trend the chances of an up day tomorrow are always fifty-fifty (post)
- Don’t buy at the daily high, at least wait for a retrace
- What is the upside opportunity vs the down side risk? Do the math!
- Risk always goes up with increasing reward—the market is very efficient in that regard
- You have to take a position on market/stock/ volatility direction—that’s the hard part
- Don’t try to pick the top, or the bottom—as Joe Kennedy said “Only a fool holds out for the top dollar”
- The past does not predict the future—this is basis of technical analysis and it’s a mirage. Charts show psychology, not forces of nature.
- The macro moves in the market are best understood as the ebb and flow of fear and greed
- Markets will move—that much is certain
- Resistance levels and trend lines are real—because others believe in them
- Black Swans kill positions that are short volatility (e.g., covered calls)
- If you have realized 80% or more of the available profit in a position, close it out. You’ll hate yourself if you let that slip away.
Vance’s rules for six figure investing
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