It is important to not take things literally. Often traders work a "system" and know that "breaking rules" is wrong (it is) but it is as important to have intuition as part of your system formula to truly succeed.
For example, if one sees a stock grow dramatically in return we often recommend selling in 1/3's. 1/3 at 20%, 1/3 at 40% and hold the final third. Many traders follow the charts and see nothing but upside, and don't "listen" to my concern to never sell at the top, and suddenly watch one piece of bad news destroy all of their profits.
The stock market has changed dramatically in the last 10 years with the advent of electronic trading, and "false financials". Years ago quarterly results were not even considered, or watched. When my Father was training me in the Wyckoff method years ago he paid no attention to P/E ratios, or short term financials but instead he followed the Point and Figure supply and demand on the stock. Volume, and supply and demand are the key variables to study.
I now teach the most important lesson, and the hardest to learn: it does not matter if a company is doing well, or if a company has a good idea or is well run. What matters is what the public and institutional traders are led to believe, and "see" in the movement of the stock. Many stocks we recommend are not worth $200 a share, but it doesn't matter. What matters is that someone, often many, are prepared to pay this price to "not be left out".
As you trade, do not take things "literally". Hold flexibility in your intellect as the integral force that runs how business runs; things change.
