Guideline #4 – Buy and Sell Based on Knowledge, Not Emotion

For most of the public, the whims of the stock market are baffling and as a result, they buy and sell based on emotion. If the news is bad on the television, the next day the public are rushing to sell. If the news is good, they are rushing to buy. A smart trader knows how to not let their emotions determine their buys and sells and instead they methodically research the stocks they trade before making a move. This does not mean that they do not, of course, take advantage of the rallies that result from the emotional buying and selling of the public