Vance’s rules for six figure investing

  • 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.

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