Cramer: Don’t break these rules if you want your stock portfolio to make money

CNBC’s Jim Cramer on Tuesday assembled out investors that he says broke a handful of rules in after-hour trading.

The “Mad Money” host shined a light on big tech properties that were sold off after Monday’s 4 p.m. market close by as much as $10 under their 9:30 a.m. occasion share prices the next day.

“These sellers ended up fleeing at the worst possible moment. They violated every eliminate in the book,” Cramer said. “I don’t want you to repeat their mistakes, so let’s go over everything these dopes did wrong.”

Apple, he prominent, traded for $186 in the after market though it opened Tuesday’s session above $196. Microsoft sold for $126 and Facebook marketed in the mid-$170s the evening prior, but their stocks started Tuesday at $133.80 and $183.69, respectively, he added.

Those stir ups followed the worst trading day of 2019 when Wall Street reacted to reignited tensions on the U.S.-China trade candid. The five most valuable U.S. companies in Microsoft, Apple, Amazon, Alphabet and Facebook all lost a sum of $162 billion in value, CNBC detailed.

Cramer spent days prior telling viewers not to panic, wait and see how China would respond to President Donald Trump’s menace to tack on new tariffs and prepare to start new positions in the market. The U.S. called China a currency manipulator for letting the yuan let go of below a key level before the country’s central bank increased the yuan’s strength on Tuesday.

“These things wouldn’t [press] keep happening if investors would simply stick to disciplines,” the host said. “That’s the whole point of give birth to rules, so you can fall back on them when you’re too overwhelmed with emotion to think rationally.”

The U.S. Funds Department on Monday declared China a currency manipulator after the country’s government let the yuan slip to 7 against the U.S. dollar for the fundamental time in more than a decade. Cramer said the sellers made a big deal out of nothing.

“There was nothing much to the currency manipulator designation,” he put. “It was pure panic and it made no sense, whatsoever.”

“I discern, because I’ve done it myself. You can read all about my idiocy in ‘Confessions of a Street Addict,'” the host said. “If these bozos had only waited until the morning, they could’ve easily sold at much higher prices. All they had to do was nothing.”

Investors can buy and sell equities in the after market via electronic exchanges between 4 p.m. and 8 p.m. ET. Cramer day in and day out warns against trading stocks in the after hours, particularly through a market order, because that’s where trained traders often lurk to short sell a stock.

Short selling is borrowing and selling a stock in hopes to buy it promote at a lower price to turn a profit. Market orders opens the door for a broker to buy or sell a client’s stock for any rate.

“After-hours trading is like the wild west, except there’s no sheriff,” Cramer said. “There’s a lot of money to be made in algorithmic craft, but it can also produce some incredibly idiotic moves, like it did last night.”

Sellers that dislike Trump are “letting their seething resentment get the best of them,” Cramer said.

“If you want to be a A-OK investor, you need to leave your political opinions at the door, as I try to do,” he said. “Just because you hate the guy, that doesn’t convey he’s gonna wreck the stock market.”

Cramer recommends that viewers build or reduce situations incrementally.

“This is corollary of my view that you don’t buy all at once,” Cramer said.

Disclosure: Cramer’s charitable trust owns shares of Facebook, Amazon, Microsoft, Alphabet and Apple.