The Ten Commandments of Trading James J. Cramer

Bulls Make Money Bears Make Money

Never Turn a Trade Into an Investment Reason the price will go higher Earnings, news, recommendation, restructuring Cut your losses if stock doesn’t materialize When investing buy small amount When trading purchase maximum amount

Your First Loss Is Your Best Loss Cut your losses quickly Stocks talk to you, they tell you things Must be disciplined

It’s Okay To Take a Loss When You Already Have One Cut your losses Let your winners do the running Realize the loss It doesn’t cut into your gains

Never Turn a Trading Gain Into an Investment Loss Never use the word “Gain” unless it was taken Don’t overstay your welcome

Tips Are For Waiters “Insiders” know something and shouldn’t share info Violate SEC rules Reasons for Tips –Get out of position –Don’t know what they are talking about

You Don’t Have a Profit Until You Sell Gains not taken can be losses Gains taken can never be losses January 2000 –Trillions of unrealized gains lost

Control Losses; Winners Take Care of Themselves It only takes one or two losses to wreck portfolio “No woulda shoulda coulda” Don’t second guess yourself –Loser mentality

Don’t Fear Missing Anything You don’t have to “Play” “I can’t miss the action” Discipline most important rule in winning investing Don’t be willing to be a “PIG”

Don’t Trade Headlines “Better Than Expected” –Punish traders Learn the whole story Take time to inform yourself

Don’t Trade Flow Don’t follow what others are doing Ignorant traders never win Lose far more, than you will make Will they tell you when to sell, too?

Pigs Get Slaughtered