Rule 1.
 
If you are a beginner or have no market profits to your credit, trade only in an imaginary way rather than with actual money; if after reading Momentum Share Trader, you think that you have learned a great deal, prove it to yourself by buying and selling stocks but without money. Enter every purchase in a ledger, as though you had given an order to your broker. Add a half point for commission and taxes. Execute your buying and setting at a time you think most appropriate, as though you were playing for real money. Neither fool yourself nor your ledger. "Know thyself and unto thyself be true." After a few months of this type of trading, strike a balance sheet. Learn how many times you were right and how many times wrong. If the times you were right exceed the times wrong (not how much money you won or lost), go ahead and trade with money, but not with very much at the beginning. Ten shares are quite sufficient and if you profit, confidence in yourself will be built up. Thereafter you may increase your trading within your means.
 
Rule 2
 
Should you trade without first laying the foundation by a few years study of the scientific aspects of the market, you might as well set your mind to the inevitable result that a good part of your capital will be lost before you succeed. (That is Wall Street’s usual charge for "breaking you in".) It is either by practice or study that you will learn how to trade. Naturally, in angling for experience, you will make plenty of mistakes, especially so if you are inadequately prepared. Therefore, if you have, let us say $1 0,000 at the time of your initiation; figure that you may lose a good part of it before you will make much headway, That is why I strongly urge preparatory study and training and to trade only in ten share lots in the beginning. Learn the market at the lowest possible tuition fee. You have time to play in 100 or 1,000 share lots after you have learned how to trade; and that may mean a few years. Should you start with 100 or 1,000 share lots, you may not have enough money left after you have learned. So start low and grow as you go along- Still better study first and trade later.
 
Rule 3.
 
Do not deal in inactive stocks. Trade in live ones.
 
Rule 4.
 
Do not hold on to a stock if the trend is against you. You may be able to buy more stock later for the same money.
 
Rule 5.
 
Do not be overly enthusiastic about your prospective profits, they may never come, or when they do may disappear because of "pride of opinion" or "hope, "Hope is your worst enemy in the market. 
 
 Rule 6
 
Do not trade with someone else’s money, whether your brokers or your friend’s. Do not trade with money, which you can ill-afford to lose. Before attempting to trade, make certain that all your obligations are taken care of.
 
Rule 7.
 
If you attempt to make money in a hurry, you will not succeed’. ‘There is money in Wall Street for you - If you do not get it to-day, it is there for you a week or month hence. You have a better chance to get it, however, if you wait’. Trade when the TIME is ripe. (Patience is a prime requisite for successful trading.)
 

Rule 8

 
Do not be discouraged if you make a mistake. The best traders make them. But learn to profit from those mistakes and try never to repeat them. Attempt to find out the underlying cause. When you have thoroughly reasoned out what you did or failed to do, resolve not to repeat the same error again. Do not place faith in luck. If you think it is luck that makes the market fluctuate, you will never be a successful trader. There are reasons why the market goes up and down, and it is up to you to find them out. (We all make mistakes but only a fool or a weakling repeats them.)