Rule 1 - Never use tips to trade

In the older days when information technology was not as advanced as it is today , many traders depended on tips to make trade decisions. It is still happening today , of course. Tips are pieces of information that come from questionable sources , and usually with no known way of tracing them. Today there are many paid trade signals subscriptions and even tough analysis are done by professionals I treat them as tips too. Do you ? Perhaps you have some better experiences to share ?

However I must also say that there are people who made money trading using tips. To them they got a better way to get more reliable tips. I made some money before based on some reliable tips on companies merger news , but also lost some money on tips that turned out sour.

In reality there is no right or wrong using tips to trade. That is my view , but I make it my Trading Rule not to trade using tips. The argument for using tips is that you can take one tip and ride it all the way to make money. However in the process of making all these gains , you forget about doing anything else. You no longer try to apply fundamental or technical analysis to market situations. You no longer treat the market as a business. You become idle …

If you want long term success in trading it is advisable to make money by correctly analyzing the market yourself. I feel it is worth the effort. Then you become master of your own destiny. As you learn to read the market action . your skill becomes transportable , and no one can take that skill away from you. You can take the knowledge that you have acquired and trade from anywhere in the world , without having to depend on tips. You just need your computer and an internet connection to survive.

Practically all markets behave in about the same manner. Once you get a hang of how to trade successfully , you can replicate correct trading practices from one market to another easily. I started with stocks and have now moved on to trade more on forex and futures , switching over was an easy task for me. On the other hand , if you learn to make money by relying on tips , you are no longer free to trade any market. You are dependent on your source , who in turn is dependent on his or her source , and so on , upwards to the ultimate source. The chain of tip givers must not be broken if you are to continue to make profits on tips. Don’t you not find this method confining and limiting ?