On discipline

Apologies for the sober sounding title, but discipline is an important thing to keep in mind if you plan to keep your sanity while dealing with the markets. Here is a list of rules I made for myself and how i fared vis-a-vis compliance.

• Don't chase a stock, let it come to you. : Even the most hyped up stock will run into bad weather some day resulting in a huge sellout. You can jump in then. The patience required is nerve-wracking, but will teach a few lessons. I would not have made sizable profits in some of my takeover hits if i had not waited for such pullbacks. e.g. J.D. Edwards and Overture, 2 from my list got acquired a few days after their earnings warnings. I had bought both only after those warnings since they seemed expensive before then.
  
• Don't trade during work hours. : I have never broken this rule. This is the most important rule if you want to keep your day job!.
  
• Don't even look at quotes during work hours : Somewhat harder to follow. I may have broken this a handful of times in the last few years.
  
• Don't login to your brokerage account during work hours : Just say NO!
  
• Limit your trades to a small window : Don't turn into a day-trader. If you make money, you are just lucky. My trades are limited to between 6:30 AM - 7:30 AM - being on the "left" coast has its advantages.
  
• Go for an account type that charges you less for buying during fixed windows and more for selling and market/real-time orders.: I use Sharebuilder and it allows buying on Tuesdays and you cannot decide the time of day or the price and the order has to be made by Monday.
  
• Sell when a stock has gone up and you can't explain it : Occasionally a takeover target goes up through the roof with no real news. Take your profit and sit on the money till you find a suitable target.
  
• Don't buy based on stock-picking advice in popular magazines : Most ask you to buy at amazing, 52-week high prices. It is a setting for disappointment and a buy-high, sell-low scenario.