Essential Stock Trading Tips You Need to Know
In order to trade stock successfully there are a number of essential stock trading tips you need to know. These are the same time-tested, time-honored, profitable stock trading tips used by effective traders everywhere.
Tip Number One -- Know why you want to trade stock. There must be some underlying motivating factors to why you want to trade stock rather than take a longer-term position in stock investing. Doesn't it make sense to know why you want to do something before you do it? Of course it does. While you may have a number of different reasons and motivations for wanting to trade stock you had absolutely, positively better make sure that your main reason is to make money... that's what stock trading is all about.
Tip Number Two -- Have a detailed step-by-step plan of how you are going to make your money grow. The entire objective of trading in the first place is to get a good return on your investment. Since there are risks involved in trading your objective should be to get a much higher than average return on your investment since you are involved in stock speculation. You have to remember that trading is different than investing. Trading is typically shorter-term in nature whereas investing is longer-term. Stock investors can wait a very long time for the price to move in their desired direction. Stock traders simply do not have that luxury.
Tip Number Three -- Have enough provisions for your journey. That's just another way of saying have enough gas in your tank or make sure that you are adequately capitalized before you start to trade stock.
Tip Number Four -- Have detailed measures for controlling your risk. As every successful trader knows risk control is an important part of the picture. Some might tell you that risk control is all of the picture, but in reality how could that really be the case. Here's a quick example to illustrate the point. You could take all your money and put it in your mattress in which case you have very little, quite possibly no risk. We would both have to agree, however, that the chances of your money increasing in value on your mattress is slim to none. That is why risk control is only part of the picture.
Tip Number Five -- Learn to take losing trades in stride. Losing trades or a natural part of stock trading. Many beginners have a real problem with accepting the fact that their analysis of the market was not spot on. It isn't a really important whether not your analysis is spot on, what is really important is that you grow your equity. Your trades are not going to be 100% successful and the sooner you learn that the sooner you will be on your way to successful stock trading.
We just covered a few time-tested tips used by successful and super successful traders. Each of these is effective in its own right and should serve you well as you move forward in your stock trading journey.
Tip Number One -- Know why you want to trade stock. There must be some underlying motivating factors to why you want to trade stock rather than take a longer-term position in stock investing. Doesn't it make sense to know why you want to do something before you do it? Of course it does. While you may have a number of different reasons and motivations for wanting to trade stock you had absolutely, positively better make sure that your main reason is to make money... that's what stock trading is all about.
Tip Number Two -- Have a detailed step-by-step plan of how you are going to make your money grow. The entire objective of trading in the first place is to get a good return on your investment. Since there are risks involved in trading your objective should be to get a much higher than average return on your investment since you are involved in stock speculation. You have to remember that trading is different than investing. Trading is typically shorter-term in nature whereas investing is longer-term. Stock investors can wait a very long time for the price to move in their desired direction. Stock traders simply do not have that luxury.
Tip Number Three -- Have enough provisions for your journey. That's just another way of saying have enough gas in your tank or make sure that you are adequately capitalized before you start to trade stock.
Tip Number Four -- Have detailed measures for controlling your risk. As every successful trader knows risk control is an important part of the picture. Some might tell you that risk control is all of the picture, but in reality how could that really be the case. Here's a quick example to illustrate the point. You could take all your money and put it in your mattress in which case you have very little, quite possibly no risk. We would both have to agree, however, that the chances of your money increasing in value on your mattress is slim to none. That is why risk control is only part of the picture.
Tip Number Five -- Learn to take losing trades in stride. Losing trades or a natural part of stock trading. Many beginners have a real problem with accepting the fact that their analysis of the market was not spot on. It isn't a really important whether not your analysis is spot on, what is really important is that you grow your equity. Your trades are not going to be 100% successful and the sooner you learn that the sooner you will be on your way to successful stock trading.
We just covered a few time-tested tips used by successful and super successful traders. Each of these is effective in its own right and should serve you well as you move forward in your stock trading journey.
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