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The Ten Commandments Of Trading

Written By Christian DeHaemer

Posted July 14, 2010

There is no doubt that you can make more money, in less time, by investing in stocks than in any other endeavor.
A few months ago after visiting Mongolia — a country that will have the highest GDP growth, most undeveloped mineral assets, and the best performing stock market over the next ten years — I told my readers to buy a small, unknown oil stock.
In fact I said called it “my favorite stock of the year”, and I urged them to open an account and buy a lot of it.

Yesterday, the company announced that they struck oil. My readers made more than 101% in a single day — and more than 442% overall.  

That type of gain would turn a $5000 investment into $22,050 in just a few months… And this stock is still so undervalued it would have to rise another 1000% to be fairly valued with its peers.
Today, people are asking what my secret is. They want to know where I find these stocks, as if there’s a secret website or some posh yacht club in Annapolis where someone whispers a stock tip as they hand me a gin gimlet.  

The truth is that I call companies, talk to CEOs, and get on a freaking plane to make sure the scene on the ground is the same as the picture they paint in their SEC documents. 

But before all of that, I run stocks through my own proprietary filter that rejects 99.9% of all possible trades.

Christian DeHaemer’s 40 Commandments of Trading
Some hoary old trader once told me it takes seven years to know what you are doing in the markets. 

This is true. 

It takes time to understand not just who is lying to you, but what their motive is — and most importantly, how to profit from it.

And believe me; everyone on Wall Street has a motive.

Mine is simple: If I make readers money, they continue with their membership, and therefore I make money. If I don’t make readers money, they fire me. 

That said, I’ve been in business for fifteen years and I even have a few readers who go back to the beginning. Of this I am very thankful. Because in truth, I couldn’t do what I love without you letting me.

With this is mind, here are the first ten of my 40 Commandments of Trading:

1. The market is God. This means that the market is always right, even if its wrong. If you think the market should be in a double dip and it isn’t, then that’s your problem — not the market’s. Your theory is wrong. You missed something. Blaming the market never made anyone any money.

2. Buy the crisis. When a political or economic crisis occurs in a country, the best thing to do is to go to and find the bank, telecom, or brewery that has sold off the most and buy it. When Wall Street fund managers sell ETFs and country funds, they sell these large stocks that act as a proxy for the country as a whole. When the money comes back, it comes back into the blue chips.

3. Vancouver is full of liars, cutthroats, and thieves. When investing in Canadian resource companies, assume they are scams unless proven otherwise.

4. Wall Street’s Hippocratic Oath:  First do no harm. In other words, it is better not to make money than to lose it.

5. Never apologize for a profit. The goal in investing is to make money. If you make 5% and the stock goes up another 1,000%, it doesn’t matter. You still made money, and that’s a good thing.

6. There is no success like success. When you make a winning trade, make it again. This means that if you trade dividend announcements, or you trade MACD crossovers, or whatever you do… If it works, keep going back to it until it doesn’t. One of the best years I ever had was shorting recent IPOs after the insider-shares unlocked.  This worked like a dream until it became too popular and IPOs started staggering their unlock dates. 

7. Never put money in a hope. If you don’t have a clear investment strategy with a simple catalyst for share price appreciation, don’t buy the stock.

8. Be your own man. Do your own research and stick to your guns. You know more about the trade than they do.

9. Never step in front of a freight train. This is also known as the “don’t catch a falling knife” rule. There are bottom signs in the market; know them and wait for them.

10. Buy big in stocks that trade less than cash. Every once in a great while, you will come across stocks that, due to margin calls or market crashes, have an income, zero debt, and more cash than their current market value. I found four of these in November 2009 after hedge funds sold all their gold stocks. 

They are now up about 1200%…


In all honesty, I’ve never lost money on rule #10.

Be on the lookout for commandments 11-20, coming soon.

Until then,

Christian DeHaemer
Editor, Wealth Daily