8 Trading Rules

These are the 8 Rules of “Carney” from the book “Ugly Americans” by Ben Mezrich (published by Harper Perennial). They are pretty good so I thought I would reproduce them here. Check out the book, it isn’t too bad. Not as much trading material as I was hoping for but still an entertaining read.

1. Never get into something you can’t get out of by the closing bell. Every trade you make, you’re looking for an exit point. Always keep your eye on the exit point.

2. Don’t ever take anything at face value. Because face value is the biggest lie of the market. Nothing is ever priced at its true worth. The key is to figure out the real, intrinsic value-and get it for much, much less.

3. One minute you have your feet on the ground and you’re moving forward. The next minute, the ground is gone and you’re falling. The key is to never land. keep it in the air as long as you can.

4. You walk into a room with a grenade, and your best-case scenario is walking back out still holding the grenade. Your worst case-scenario is that the grenade explodes, blowing you into little bloody pieces. The moral of the story: don’t make bets with no upside.

5. Don’t overthink. If it looks like a duck and quacks like a duck-it’s a duck.

6. Fear is the greatest motivator. Motivation is what it takes to find profit.

7. The first place to look for a solution is within the problem itself.

8. The ends justify the means, but there’s only one end that really matters. Ending up on a beach with a bottle of champagne.

Posted by Cory Mitchell