1.  Don't buy stock breakouts, buy the scary dips.

2.  Don't buy stock breakouts; buy the first pullback to the 10-day average following the breakout. 

Sometimes stocks break out so strongly that they don't pull back.  In these instances, smart money tends to buy at the 10-day average.

3.  Understand that stock support is flexible, not rigid.

Oftentimes stocks trade briefly below their trend lines as smart money trades the traders to take out the stop losses placed below support. 

4.  Profit by taking profit.

There's an old trader saw that says "cut your losses quickly, but let your winnings run."  It sounds nice, but it is impractical.  By letting winnings run, most traders find that their winnings run away from them and turn into losses. 

If you quickly limit your losses and also quickly lock in your gains, it is actually possible to be wrong 50% of the time and still profit handsomely. 

In this example, losses are cut quickly at 3% for unsuccessful trades and profits are automatically taken at 10% for successful trades.

5.  Pay attention to sentiment.

Smart money understands crowd psychology.  They understand that the crowd operates with a herd mentality.  When the crowd's mood reaches extremes, smart money will trade against the crowd.  When the crowd's sentiment readings are extremely bearish, you can rest assured that smart money is very likely taking advantage of the fear and buying heavily.  When the crowd is overly enthusiastic, it's pretty likely that smart money is taking advantage of the crowd's enthusiasm and taking profits and perhaps selling short.