As we all know, Captain Ed Murphy was an engineer in the US Airforce. One day after finding that a part had been put wrong by a technician, he cursed and said, "If there is any way to do it wrong, he'll find it." MURPHY'S LAWS CAME INTO EXISTENCE. Over the years, this took the form, "IF ANYTHING CAN GO WRONG, IT WILL."
Today with contributions from all and sundry, Murphy's laws encompass every walk of life. All these can be found at
http://www.murphys-laws.com/.
However, after searching extensively for Murphy's Laws of Trading, I found that there were none. To correct this grevious insult to the trading community, I compiled the first 20 of them and started this thread so that my trader friends could contribute more. The 20 'original' Murphy's Laws of Trading are:
- If you have to invest in one of two stocks, then the stock that you do not invest in will perform better.
- When you buy, it will be at the high of the day and when you sell it will be at the low of the day.
- A stock will always rise after you sell it and conversely fall after you buy it.
- If you buy a stock with the thought that there is no downside risk, one will suddenly emerge.
- When somebody gives you a strong tip be sure that he is waiting to get rid of his holdings.
- A stock that is trading sideways is waiting for you to sell it.
- The triggering of a stop-loss is also the trigger for a trend reversal.
- Buy on rumour and sell on rumour. Follow the trend!
- Technical Analysis is an excellent tool to explain why something happened after it happened.
- Trader Newton’s Law: For every one who makes money there is one who loses the exact same amount.
- Bullishness and bearishness are nothing but a civilized man’s animal instincts.
- When you feel confident that you have fished at the bottom, a new bottom will emerge.
- Trends always end.
- Trends always reverse.
- Smile … tomorrow will be worse.
- Soros’ Law: The idea of good investing is to identify the trend whose premise is false.
- A fine is a tax for doing wrong. A tax is a fine for doing well.
- Greenspan’s Law: "You'll only know it was a bubble if it bursts".
- Experience is what causes you to make new mistakes instead of old ones.
- Somebody else will always make money out of the stock that you felt was not worth buying.
Cheers & happy trading
10th October 2006, 09:52 PM
Murphy's Laws of Trading
Similar Threads for: Murphy's Laws of Trading
