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Timing

  
  Education
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Timing your entries and exits is crucial to your success as a trader. The charts and price action tell you when the time is right. You just need to pay attention and recognize what they are saying.When you can simplify your information sources down to only a few then your task will become easier. After all , how many indicators do you really need when the chart shows it is going up and the markets show they are going up? How much confirmation do you need? And confirmation of what? The future is unwritten. The more you wait, the farther way the prime entry/exit spot is moving away from you. The more risk you take on. More risk can play on your emotions. Indicators are always behind the times. I view them as pretty useless. The price on the chart and the candles are my REAL TIME indicators. Sounds simple and it is.So if you have simplified things in the manner I describe, the next item to truly believe in is probabilities. I (and everybody else) don’t know what is going to happen in the future. However, I know that profit taking will happen after long trends, pops, drops etc. Trading the probability of a reversal after a extended uptrend when the candles are getting shorter, volume is dropping off and the overall markets showing the same is only taking the view that gravity usually takes effect and that the stock will drop. This is timing the market. My mind is not encumbered by hopes, dream and predictions of what will happen. I think of only the probability. There is a huge difference between the two psychologically after you take some losers in a row. I don’t take the losers personally as a reflection of my poor judgment. I just think that it’s the law of probabilities playing themselves out and so I can go into my next trade opportunity unafraid and without hesitation.

Control

  
  Education
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Control-Stocks rise when they are being bought up. Stocks fall when they are being sold off. I always ask myself “Who is in control. The buyers or sellers.” Control changes often and in different time frames you can argue that one party or the other were merely taking a rest.
I generally buy stocks that are going up and short sell stocks that are falling. But I also play the sharp reversals that happen if there is a huge gain or drop as I know gravity will take effect and profit taking will occur. The smart way to day trade is to be on the winning side be it buyers or sellers.
As a small fish in a big ocean I can only ride on the coattails of the big boys who actually move the market. My job as a trader is to recognize when trend or momentum is starting to kick in and climb aboard. Short term trends or momentum are the only thing that I trade. The old cliche’ “the trend is your friend” is so very true.
I only trade in the direction the chart is telling me to. Maybe you can watch the talking heads on TV blathering on or read about how great some stock is without forming an opinion on it. I can’t, so it’s safer to insulate myself from any and all information. I actually don’t care what, where, why, how or when a company does what it does. Who am I to be able to process all this information? I do know that when a stock is rising, more people are buying it than selling it and vice versa. Seems easier to me to only look at and believe the chart and trade accordingly. If I have preconceived notions about what the stock may do, I will not be able to cut my losses when the chart tells me to. I will hold on to the dream all the way to the poor house. Always trade with the trend.
Cutting your losers is one of the most important aspects of trading.Unless you have an unlimited pile of money to fritter away you must admit you’re wrong and exit the trade. If you don’t you will not have enough to remain in the game. End of story.
Letting the winners run is also important. They are winners after all and that is all that counts. Adding size (buying more shares) can turn little winners into big winners.
If you disregard any or all of these 3 simple rules you won’t be around trading very long.

Stock Market Wisdom :Benjamin Lee

  
  Education
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Benjamin Lee

“There are laws governing the financial markets just as there is gravity law to keep all things together on the earth.”

  • “Stock market is a battlefield. Always remember to survive in the game first. Only those that survive the battle can enjoy the spoils of the war.”
  • “Never revenge for your losses in share market. It will get you killed.”
  • “It is better to be late, and catch the right worm, than catching the snake’s tail.”
  • “The stock market is always there. It has been there for centuries, and it lives longer than anyone of us here. Therefore, don’t rush and trade all your capital like there is no tomorrow.”
  • “Human is always subject to his own emotion. How many of us can break free from the greed, fear, and unfounded hope that are so common in stock market?”

“Do not underestimate the power of a raging bull, and the strength of a bear in stock market. Both have the power to trample you to death if you fight against them.”

“The secret recipe for success in stock market is simple. 30% in market analysis skills, 30% in risks management, 30% in emotion control, and 10% in luck.”

“Time is the cause, Volume is the fuel, and Price is the result. Of all these three, Time is the greatest factor in determining stock market direction.”

“The worst enemy to any stock traders and investors are Greed, Fear, and unfounded Hope.”

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