He strongly believes in price reflecting all possible information about the stock. Therefore, the price of the equity is sufficient to let you in to the fundamentals of the company, market psychology and macroeconomic developments and risks. Basically, price is real.
In that sense, technical analysis becomes very powerful in gauging the future performance of the stock.
1. Money is hard to earn. In fact, very hard to earn - never waste it by not knowing what you are in for. $1 lost today will lose its value and its possible compounding interest forever. So figure carefully: if you are going to lose it, you are better off compounding it in the bank.
2. If there's no trend, there's no trade. As simple as that. Dive into areas only where there is a very clear uptrend or downtrend. It is much simpler in a clear up or downtrend. Follow the prices because that is what everyone else values, factoring in all possible information.
3. Discipline is a tough but necessary practice.
- Have a goal in your trades and do not overtrade. Once you hit your target, get out. Take your profits, take your profits. There is no point predicting the peak. It is also worse to be gripped by the market day in day out. Take your profits and go out get a life.
- Accept mistakes but never losses. There is nothing more important stop losses. Once the trade goes strongly against the direction of your punt, forget it and get out.
At the end of the day, this is a self-realisation journey.
Learn about yourself. That's the biggest gain.