1:56 PM
Trading Tips
Trading with money you can't afford to lose.
One of the greatest obstacles to successful trading is using money that you really can’t afford to lose. Ultimately what happens is that when someone knows in the back of their mind that they are risking the rent money, they trade out of fear and emotion versus logic and no emotion. If you are in this situation I highly recommend that you stop trading until you earn enough to put into an account that you truly can afford to lose without causing major financial setbacks. You can start with as little as $2000 and trade stocks under $30. Other traders will get opinions from friends, family or broker.
Nothing is more exciting then getting into a trade that blasts off and puts you into a highly profitable situation.
The simple remedy for this is to know where and how you will take profits once you enter the trade.
Forming an opinion. HOPE---WISH---PRAY
If you ever find yourself doing one or more of the above while in a trade then you are in big trouble! As I have already said, the market doesn’t give a damn. All the hoping, wishing and praying in the world is not going to turn a losing trade into a winning one.
Not sticking to your plan
A big source of trouble arises when a trader starts to deviate from their strategy.
Not knowing how to get out of a losing trade.
Having an ego.
I have seen a number of individuals enter the trading game that were extremely successful in other business ventures.
Falling in love with a stock or trade. Back in the spring of 1999 EFAX was a really hot stock. I waited to buy it on a dip and did so at $19/share. Here’s the problem. I finally had to break off my love affair when the stock hit $9. (Ouch!)
The moral of this story is never fall in love, let alone get married to any stock.
One of the greatest obstacles to successful trading is using money that you really can’t afford to lose. Ultimately what happens is that when someone knows in the back of their mind that they are risking the rent money, they trade out of fear and emotion versus logic and no emotion. If you are in this situation I highly recommend that you stop trading until you earn enough to put into an account that you truly can afford to lose without causing major financial setbacks. You can start with as little as $2000 and trade stocks under $30. Other traders will get opinions from friends, family or broker.
Nothing is more exciting then getting into a trade that blasts off and puts you into a highly profitable situation.
The simple remedy for this is to know where and how you will take profits once you enter the trade.
Forming an opinion. HOPE---WISH---PRAY
If you ever find yourself doing one or more of the above while in a trade then you are in big trouble! As I have already said, the market doesn’t give a damn. All the hoping, wishing and praying in the world is not going to turn a losing trade into a winning one.
Not sticking to your plan
A big source of trouble arises when a trader starts to deviate from their strategy.
Not knowing how to get out of a losing trade.
Having an ego.
I have seen a number of individuals enter the trading game that were extremely successful in other business ventures.
Falling in love with a stock or trade. Back in the spring of 1999 EFAX was a really hot stock. I waited to buy it on a dip and did so at $19/share. Here’s the problem. I finally had to break off my love affair when the stock hit $9. (Ouch!)
The moral of this story is never fall in love, let alone get married to any stock.
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