Five Stock Trading Tips
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Never confuse stock trading with investing. Trading stock is a form of gambling.  
Company earnings have very little influence on a stocks perceived trade value.
As the goal of buying stock for later trading is to make a profit through other 
traders loss, a successful trader will need to understand human psychology.  Why 
does a stock have value in the other traders mind, and how can that be exploited? 
Remember that the goal of stock trading is to eventually extract the cash gains! 
Because other traders often do things on impulse rather than logic, and often 
will panic buy or sell, the smart stock trader should follow simple safety rules 
to prevent being caught in a wave of emotion:


1) NEVER buy on "Margin":

	- statistically the odds of miscalculating are higher than the odds of profiting
	- regulators sometimes intervene, causing delays which could lead to your financial ruin


2) ALWAYS set "Stops" before trading:

	- Stops tell your broker how to proceed should you become temporarily incommunicado
	- Before the trade, determine the maximum loss endurable, then NEVER later go below this limit
	a) Complete short trades within the same trading day (employ a Time-based trade if necessary)
	b) Limit yourself to only 2 buys and 2 sells of the same Stock each trading day
	c) Unless something absolutely extrodinary is occuring, once set avoid fiddling with the Stops


3) Protect capital by reducing risk:

	FORMULA: The Risk-to-Reward ratio = Expected Return /divided by/ Amount Risked
	- Longterm holding of High Yeild dividend Stocks will eventually recoup the cost of the purchase
	- Avoid switching to Bonds, as they are harder to sell than Stocks, especially in quantity
	- In a financial emergency, consider borrowing funds rather than liquidating Stocks
	a) Holdon to stocks during a selloff panic if you believe the share price will eventually recover
	b) Maintain at least a 5% uninvested cash reserve "just in case"
	c) Prioritise investment payback (eventually purchases should be financed from profit cash alone)


4) Treat each day on its own merit:

	- Scheduled trading often induces a sharp price change within the first 20 minutes of the day
	- The Opening Price will be usually be very close to either the Low or High of that day
	- Long term Trends have little influence on short trades


5) Only take a trade if:

	a) You have the cash in hand and can afford the risk (always AVOID Short Selling)
	b) There is an identifiable trading pattern that can be exploited
	c) Research suggests there is NO subterfuge afoot (even if in your favor, regulators may step in)
	d) Distractions are not currently inteferring with your focus


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OBSERVATIONS:

	1) The presence of "sacred ratios" (.618, .786, 1.00, 1.272, and 1.618) in patterns is favorable
	2) The repercussions from after-hours-trading appears around 8 minutes into the trading day
	3) Liquidity potential is far higher with stocks over both bonds and futures
	4) Dividend yield is not a consideration with stock being acquired only for short term trading
	5) Long trading and Day trading require very different strategies to win