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3 Simple Techniques

  
  Education
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Once you sort through all the trading jargon and strategies, making a good stock trade is much easier than people tend to make it. In other words, most people make stock trading harder than it needs to be.

After all, when trading we are generally dealing with thousands of dollars per holding, so it can be easy for traders to continually second guess and put pressure on themselves before finally pulling the trigger.

Below are 3 simple techniques that will having you making good stock trades more often than not.

  1. Create an entry point – Where is a good spot to buy the stock? Based on your strategy, this could be after a breakout, after a pullback, and so on. Once you choose an entry style stick to it and use it every time.
  2. Create a failure point – This is also know as creating stop losses. Basically determine the eject button before entering the stock. Based on your analysis, this should be the price where the trade is considered a bust when it falls below that price.
  3. Create a price target – It is easy to say a stock will go up, but when do you know when to sell? Are you necessarily tying up your capital in a stock that already saw its boost? By creating a price target before entering a stock, you better utilize your capital as you collect gains and move on to the next stock.

That’s it! Yes, it is really that simple, by determining these 3 critical points, the hardest part of stock trading should be deciding how to spend all that money you made.

Continue to tweak and perfect your criteria for determining these critical points, and eventually you’ll master a surefire trading system.

Think Like Las Vegas

  
  Education
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Do you think of each trade as an island, as the great hope, or do you think in terms of probabilities over a series of trades? Casinos make their money by keeping the odds in their favor over a large number of bets. And that’s how successful traders think too. They don’t get attached to the success or failure of any given trade. Their primary goal is to stay calm, relaxed and open to the market’s opportunities so that they can execute their edge precisely and keep the odds in their favor. Thats why I make such a big deal about emotional clearing and staying calm. The emotional clearing technique I use is literally worth tens of thousands of dollars to me in bottom line results.

Real Times News Will Not Increase Your Bankroll

  
  Education
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Another explanation as to why real time news is useless:

Mike Bloomberg became the richest man in New York by selling traders just fifteen seconds head start on the data they needed. Fifteen seconds costs thousands of dollars a month per trader. But in most cases, what we get online is not actually in real-time and it’s not news, either.

Getting ever closer to the first moment is expensive in other ways. It might cost you in boredom, because watching an entire event just to see the good parts takes time, particularly if there’s no guarantee that there will even be good parts.

It might cost you in filtering, because the less you’re willing to wait, the more likely it is that you’ll see news that’s incorrect, out of context or not nearly as valuable as it appears.

When journalists, analysts and pundits are all racing to bring you the ‘news’ first, you get less actual news and more reflexive noise. Go watch an hour of cable news from a year ago… what were they yelling about that we actually care about today? (more…)

The Top Ten Similiarities of Winning Traders

  
  Education
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You can read trading, books until you are red-eyed, you can spend thousands of dollars on seminars, you can try to get successful traders to give you the secret sauce of trading or the Holy Grail. But, in the end it is simply you versus the markets. You have to pick your system, your risk tolerance, and take the heat in your own account, it will be your own money you lose.

No one can tell you the right system and method for you. If you can take draw downs in equity mixed with long term capital growth then trend following may be for you. If you love playing the hottest stocks in the market then CAN-SLIM or the Darvas System may be the right systems for you. If you just have little patience and love action then you can join the few who have mastered day trading. There really is no right system for everyone, it depends on what you can handle. However here is what all winning traders must have  to win in the markets regardless of time frame and system:

Trading System

  • They trade a robust system or method that wins more money over time than it loses.
  • Their system gives them a reward to risk ratio that is in their favor.
  • Their system or method is proven to work with a live trading record over many markets and trades or has  historical back testing. (more…)

"6 Skills For Traders"

  
  Education
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Whether it is day trading, scalping, or investing,there are fundamental skills that each trader should master. Skill-building activities will help you sharpen your ability to make money and cash in on critical market movements.
1. Don’t Be a Perfectionist
Consistent profits are achieved from winning more than you lose – not winning every single trade.There are plenty of professional traders who generate profits by winning just 10% of their trades by maximizing gains and minimizing their losses.
2. Stick to a Trading Plan
Developing a trading plan is extremely important.Day trading around your own set plan for each position will produce consistent profits. A trading plan planner should be your best friend when developing your own trading
style. The key is sticking to what you’ve written down on paper.
3. Know the Odds
You should know the payoff odds for each trade that you take.Scalping produces large gains from small movements with higher risk than swing trading. Your trading plan should include a way to regulate how much capital you’re willing to risk on each position – but you should never risk more than 2% of your total account value. (more…)

Common Trading Mistakes

  
  Education
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In trading, as in life in general, we all know that experience is the best teacher. However, failures in stock market trading bear more weight since you stand to lose thousands of dollars (or more) with each mistake that you make. So as to help you recognize red flags and prevent you from losing money further, here is a list of some common mistakes you might want to avoid.

# 1: Lack of proper knowledge
Many people who come into stock trading with the notion that they can simply learn the ropes along the way may be fatally mistaken. This is because this kind of activity requires some degree of stock market know-how, as well as experience. First, you have to learn how to trade stocks, because this is the only that you can be familiar with terms, such as “stocks,” “shares,” “dividends,” “trends,” and so on. Without proper education, you might make decisions that could prove to be costly in the future. If you want to engage in trading, the first rule is for you to learn about the basics-read a book, enroll in a course, attend lectures by experts-anything that can help you understand what this is all about.

# 2: Acting on Impulse
In learning stock trading, you will realize that many emotions may come into play as you go through each and every transaction-impatience, greed, fear, and over confidence are some of these emotions. One of the most common mistakes people commit while trading is making decisions based on impulse. While it is true that you can feel a wide range of emotions as you evaluate the data in front of you, do remember that a cool, logical reasoning must prevail. Do whatever you can to always make decisions on a clear head.

# 3: Not having enough practice
As you engage in trading, the saying that “practice makes perfect” could not be truer. Again, if you want to learn how to trade stocks and are serious about engaging in trading, then you should also enhance your skills apart from just learning the basics. However, you could not afford the trial and error method using real money, because this is impractical and a waste of time. Fortunately, there are now some sophisticated tools that can help you practice through simulated trading and practice accounts. For a fee, companies can help you set up a practice account, through which you can execute “simulated trading.” What this does is it helps you learn how to trade stocks by honing your skills without the risk of losing actual money.

# 4: Having unrealistic expectations
Finally, another common mistake in trading is having unrealistic expectations. Sure, we may have all heard of those who got rich quick because of the stock market, but you cannot expect to earn millions without being able to make sound decisions based on fact. In the process of learning stock trading, you must be able to set a clear set of objectives, and not unrealistic expectations that could lead you to make rash (and costly) decisions.

In the future, try to avoid committing similar mistakes so that you can truly benefit from the time and effort you are trading in the stock market.

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