Stan Weinstein's Rules

I've mentioned here before the terrific book, Secrets for Profiting in Bull and Bear Markets.

Why do I like this book so much? Reading it was a bit of a "come to Jesus" event, as he addressed a couple of really bad habits that I have--know that I have--yet continue to indulge. Remember, the definition of "stupid"? It's doing the same thing over and over and hoping for a different outcome. I'm not perennially stupid, but after reading this book, I was re-invigorated to expunge these habits from my repertoire.This book is not a book about the more arcane elements of technical analysis, but rather using charts to look at volume/price patterns determine where a stock is in it's life cycle--opportune times to both buy and sell--to protect capital and maximize risk/reward. To me it is using TA at it's very essence to see if there is more buying or selling pressure OR if it is indeterminate.
Here are Stan Weinstein’s rules.They are paraphrased except where noted by quotes. Again, I believe that this book would be a great addition to your investment bookshelf.

Determine overall market direction. Find the strongest sectors.Find the strongest stocks in these sectors.. After scanning the horizon. . .

• If an investor do most of your buying when a stock is basing (Stage 1) and starts to rise (Stage 2). If you are a trader you want to buy on the breakout and other continuation patterns within this stage.

• Determine the protective stops (for long/shorts). If they are too far away from the current price, wait for a better setup.
• Don’t sell stocks in Stages 1 or 3.
• Don’t buy stocks that are in Stage 3 or 4.
• Consider selling short when the overall trend is bearish—but use stops
• Stage analysis applies to all investments governed by supply demand (mutual funds, options, futures, commodities).
• “Never guess a bottom. Learn the important lesson that it’s better to be late and buy in Stage 2, than to grab a stock that looks cheap but will be 40 to 50 percent cheaper later in Stage 4.”
• There’s no need to invested 100% of the time.
• Buy Stage 2 Strength; sell Stage 4 weakness. “In other words, be in harmony with the tape.”
• “Whenever there is conflict between the price volume action and the earnings, always go with the objective message being supplied by the technical approach.