Before having position
Do not buy on the ex-dividend date.
After earnings are released, if the stock price surges higher, do not buy on the same day unless the trading volume is more than twice the average volume and the stock closes near its high.
After having position
After buying, if it looks like the stock will close with a long upper shadow before the market closes and volume are more than average, immediately sell the position.
(A long upper shadow means the upper wick accounts for more than 40% of the distance between the high and low.)
No matter how good the indicators look, it could still be a bear trap.
After a high-volume rally, if a dark cloud cover pattern appears the next day without volume while the MACD has not weakened yet, sell half of the position first and observe the following day. If the price still cannot break through the overhead resistance, immediately sell the remaining shares.
When a stock is in an uptrend, if it forms an upper-shadow bearish candle without significant volume, place the stop-loss at that day’s low.
