Imbalance or abnormity is never so dangerous as when it is widely perceived or accepted as being normal. The worst thing you can do is not to try.

Some of the best trades come when everyone gets very panicky. The crowd can often act very stupidly in the markets. You can picture price fluctuations around an equilibrium level as a rubber band being stretched -- if it gets pulled too far, eventually it will snap back. As a short-term trader, I try to wait until the rubber band is stretched to its extreme point.

I try to wait until things set up just right before I take a trade. Then, when I'm ready to take the trade, I slowly count to ten before I pick up the phone. It's better to have the wrong idea and good timing than the right idea and bad timing.

If you ever find yourself tempted to seek out someone else's opinion on a trade, that's usually a sure sign that you should get out of your position.

Perhaps my number one rule is: Don't try to make a profit on a bad trade, just try to find the best place to get out.

There are too many unpredictable things that can happen within two months. To me, the ideal trade lasts ten days, but I approach every trade as if I'm only going to hold it two or three days.

I believe that only short-term price swings can be predicted with any precision. The accuracy of a prediction drops off dramatically, the more distant the forecast time. I'm a strong believer in chaos theory.