There is a scene where Harvey - a member of Butch and Sundance's gang - decides to take control of the gang by ousting Butch. They get involved in a knife fight. Before the fight can start, Butch wants to straighten out the rules.
Harvey says: "Rules? In a knife fight? No rules!" At which point, Butch just walks up to him and kicks him in the groin.
There are no (money-making) rules in the stock market. If you have a 'get in - get out - make a killing' mentality, and are not careful about learning the basic guiding principles of long-term investing, you are likely to get kicked where it hurts most (i.e. in your wallet).
What about the Jhunjhunwalas and the Damanis? Aren't they making a killing every day by short-term trading? Sure they are. But they are seasoned pros. You don't want to get into a fight with them!
A simple and sensible way to build wealth from the stock market is to take a long-term view by investing small sums of money on a regular basis, and letting the amazing power of compounding do its magic over the years.
Without any further digression, here are the ten guiding principles (do's and don'ts) of successful long-term investing:
1. Sell the Losers and let the Winners ride (easier said than done)
2. Don't chase 'sure shot tips'
3. Don't worry about intra-day and short-term price movements
4. Don't give undue importance to the P/E ratio
5. Resist the impulse to buy penny stocks
6. Invest according to a clearly-defined strategy and stick with it
7. Focus on the future potential of a company, not just its past data
8. Always think long-term (not just 1 or 2 years)
9. Be open-minded about market-cap
10. Be concerned, but don't worry, about taxes (Hint: Long-term investing is more tax efficient)
So there, you have it. By following these simple guidelines, any one can make money from the stock market.
Read more in this article by the staff of investopedia.com.