1) Trade only with the identified trend of the market
2) Stay out of flat or directionless markets
3) Pyramid your winning positions to compound your returns
The pyramid strategy is a key strategy that all the best traders utilized to create their best gains.
4) Adhere to a strict loss-cutting policy. Three points from the buy point.
5) Stay focused on only a handful of stocks at a time — ususally 10 or less
As is always the case, the former leaders that rose the most also dove the most. The bigger they are, the harder they fall. So focus on leaders on both side of markets.
6) Trade only the real leaders from the leading industries
Adapted from "How Legendary Traders Made Millions" chapter 2.