Source: 45 Years In Wall Street by William Gann (https://polar-sun.xyz/index.php?topic=20.0), pg.16The book I extracted this from was published in 1949 so it will seem outdated to some. A principle is a principle and a rule is a rule; if they changed over the time either they were not true or the environment of their origin has changed drastically enough a comparison of situations finds that there is little similarity in the comparison. I doubt the stock market has changed fundamentally since 1949 although it acts differently. It does not act fundamentally different so fundamentally these rules are still valid rules. Some adjustment
may be needed for edge cases. Successful investor and traders still repeat these rules expressed differently which is the greatest indicator of their truthfulness.
I keep the spelling the same as it is printed in the book.
"TWENTY-FOUR NEVER-FAILING RULES
- Amount of capital to use: Divide your capital into 10 equal parts and never risk more than one-tenth of your capital on any one trade.
- Use stop loss orders. Always protect a trade when you make it with a stop loss order 3 to 5 points away.
- Never overtrade.
- Never let a profit run into a loss. After you once have a profit of 3 points or more, raise your stop loss order so that you will have no loss of capital.
- Do not buck the trend. Never buy or sell if you are not sure of the trend according to your charts.
- When in doubt, get out, and don't get in when in doubt.
- Trade in active stocks. Keep out of slow, dead ones.
- Equal distribution of risk. Trade in 4 or 5 stocks, if possible. Avoid tying up all your stocks in any one stock.
- Never limit your orders or fix a buying or selling price. Trade at the market.
- Don't close your trades without a good reason. follow up with a stop loss order to protect your profits.
- Accumulate a surplus. After you have made a series of successful trades, put some money into surplus account to be used only in emergency or in times of panic.
- Never buy just to get a dividend.
- Never average a loss. this is one of the worst mistakes a trader can make.
- Never get out of the market just because you have lost patience or get into the market because you are anxious from waiting.
- Avoid taking small profits and big losses.
- Never cancel a stop loss order after you have placed it at the time you make a trade.
- Avoid getting in and out of the market too often.
- Be just as willing to sell short as you are to buy. Let your object be to keep with the trend and make money.
- Never buy just because the price of a stock is low or sell short just because the price is high.
- Be careful about pyramiding at the wrong time. Wait until the stock is very active and has crossed Resistance Levels before buying more and until it has broken out of the zone of distribution before selling more.
- Select the stocks with small volume of shares outstanding to pyramid on the buying side and the ones with the largest volume of stock outstanding to sell short.
- Never hedge. If you are long of one stock and it starts to go down, do not sell another stock short to hedge it. Get out at the market; take your loss and wait for another opportunity.
- Never change your position in the market without a good reason. When you make a trade, let it be for some good reason or according to some definite plan; then do not get out without a definite indication of change in trend.
- Avoid increasing your trading after a long period of success or a period of profitable trades.
When you decide to make a trade be sure that you are not violating any of these 24 rules which are vital and important to your success. When you close a trade with a loss, go over these rules and see which rule you have violated; then do not make the same mistake the second time. Experience and investigation will convince you of the value of these rules, and observation and study will lead you to a correct and practical theory for success in Wall Street."