The Ten Rules of Trading

Rev Shark, who write an excellent trading diary for RealMoney, refers to trader Daniel Rosenblum’s 10 rules successful trading.

Since this not anywhere else on line, and because Daniel did such a nice job with it, here’s a taste of his perspective — for your reading and investing pleasure:

1. Don’t swing for the fences; Never put it all on red.

Never, ever, let one trade determine your profit and loss for the year, or if it goes wrong, put your capital at risk. I did it once and the memory of that experience burns me almost daily. In most cases, margin should be avoided and "doubling down" a bad trade is a sucker’s bet. Most times it just pays to take the loss and move on. The good thing about being a trader is that every day there are new opportunities to make money. Just make sure you can stay in the game.

2. When the market is bad, its time to be more cautious.

Sounds obvious, but when the market is below key moving averages, unless that trade looks really enticing, it is probably better to sit on your hands. We did a lot of hand-sitting during the bear market and we survived better than most.

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Politics & Shopping

Are you donating your money to a party that holds the opposite of your political views?

You may be doing so, albeit indirectly. Nearly everytime you spend money somewhere, some of it (a few cents, anyway) ends up as a corporate political donation. While most companies play both sides of the aisle — looking to stave off unfriendly regulation at the least — some seem to be strictly Red or Blue outfits, donating money to just one side.

That’s not exactly the smartest business strategy, potentially alienating half of your clientele.

It used to be exceedingly difficult to determine who was giving what. Thanks to recent disclosure rules — and a slew of webtools — its now quite simple to determine where your shopping dollars are going:

Check out:

Choose The Blue

Open Secrets

Center for Public Integrity

The Center for Responsive Politics

Business for Social Responsibility

Politcal Moneyline

Special mention should go to Choose The Blue for their incredibly easy to use page. While an obviously Democratic site, they get kudos for their very complete and even handed data. Choose any shopping category, and their crossed reference menu shows you exactly where your money is going.

There were a few surprsies. GM splits their donations 60/40 GOP/Dem; Ford was more heavily Red at 71/29, while Toyota was the only Blue manufacturer at 74%. Progressive Insurance was 91% Blue (no surprise there), while State Farm was 81% Red.

Worth noting that both my favorite (TGT) and least favorite (WMT) discounters are Red: Target at 72%, and Walmart at 81%. The cooperative CostCo is 91% Blue . . . Tech firms were surprisingly Blue (Sun, Cicso, HP and IBM), with Siebel, Intuit and Activision the Red exceptions, as were music .

Terrific guide if you want to know where your dollars are going this holiday season . . .


Additional Source:
Political Favors for Sale
By Selena Maranjian
Motley Fool, September 30, 2002

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Category: Finance, Politics

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