Ten Rules of Trading from Bernard Baruch

By Colibri Trader

Baruch listed his ten rules of trading in his autobiography Bernard Baruch: My Own Story. Baruch made his first million by the age of 35. He then went on to be a counsel for several Presidents. He states that he was skeptical about the usefulness of advice and was therefore reluctant to lay down any hard and fast rules. He offered the following as some points learned from his personal experience that might be worth considering from those ones who are able to master self-discipline. I will enlist them in the order he gave them in his book:


  • Don’t speculate unless you can make it a full-time job.
  • Beware of barbers, beauticians, waiters- of anyone- bringing gifts of “inside” information or “tips”.
  • Before you buy a security, find out everything you can about the company, its management and competitors, its earnings and possibilities for growth.
  • Don’t try to buy at the bottom and sell at the top. This can’t be done — except by liars.
  • Learn how to take your losses quickly and cleanly. Don’t expect to be right all the time. If you have made a mistake, cut your losses as quickly as possible.
  • Don’t buy too many different securities. Better have only a few investments which can be watched.
  • Make a periodic reappraisal of all your investments to see whether changing developments have altered their prospects.
  • Study your tax position to know when you can sell to greatest advantage.
  • Always keep a good part of your capital in a cash reserve. Never invest all your funds.
  • Don’t try to be a jack of all investments. Stick to the field you know best.

I hope the above rules could be helpful for the ones of you that are still lacking discipline in trading. I still find them extremely relevant and believe that they are a great piece of trading/investment wisdom.


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