Buy leading stocks in leading industries
Focus on strong earnings and sales growth
Look for quarterly earnings increases of 25% or more
Prefer annual earnings growth over the last three years
Choose companies with new products, services, management, or price highs
Use the CAN SLIM method
Seek stocks with high relative strength
Buy when a stock breaks out of a proper base
Use volume as confirmation of institutional demand
Avoid low-priced laggard stocks
Cut losses quickly, typically around 7% to 8%
Let winners run
Pay attention to market direction
Follow general market trends before buying aggressively
Favor stocks with strong institutional sponsorship
Avoid excessive diversification
Study charts to identify supply and demand
Buy near pivot points, not after extended advances
Sell when a stock shows major weakness or breaks key support
Protect capital first
Keep records of your trades and review mistakes