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Uncover the Myths of Stock Trading

Uncover the Myths of Stock Trading

I’ve made a living as a Stock Trader for over 15 years, and have really learned the ins and outs of the business. But  I didn’t make my start at a big brokerage firm that taught me everything through slick training course.  I made it through trial and error, taking seminars and classes and learning as I go. 

While I may have taken longer to succeed using this self taught method, it has given me a lot more real world knowledge of stock trading than I would have gotten following the one process taught by my employer.  For one,  I have found a number of myths that crop up again and again when talking to people about stock trading.  Here are three of them: 

First, is the myth that only certain types of people make successful stock traders.  True, those folks who can analyze stock trends and pick the big winners are typically left brained thinkers (more than 60%), which is probably how this myth originated.

But there really is something in stock trading for every type of thinker.  If you aren’t a left brained analytical type, you just need to find a process that works well for you. I am definitely right brained, and I am being completely honest when I tell you  I would hate to sit around and analyze stocks all day.  Despite this, I have made a great living trading stocks.  Anyone else can too.     

Second, is the belief that stock trading is speculative, and carries as much or more risk as owning your own business.  Yes, people have lost everything in the stock market, and those are the stories the media loves to report on that intimidate a lot of people.   

But I have discovered that if you can establish a process for setting your stops can limit your risks to a tolerable comfort level, stock trading is really a very low risk profession.  To illustrate, I have created a system for myself that allows me to trade with a success rate of up to 75% , which is hard to beat!  I can’t think of any other business that can give me that kind of low risk return.

Finally, how many times have you heard that its a full time job to make consistent big money in the stock market?  Absolutely true for some kinds of trading and especially if you don’t have good stock pickers to rely on.  Then you are stuck doing the grunt and the leg work in a fast changing environment ” sure that takes a lot of time. 

However, rest assured it is possible to make a full time living trading stock for 2-4 hours a day.  What you do with the rest of the day is up to you!   The trick is to find a process that meets your comfort level of risk and is very efficient with your time.   There are a lot of courses available and I agree it can be intimidating to find the one that’s right for you.  Investigate several choices and make sure to ask lots of questions before signing up.  If you don’t get satisfactory answers to your questions, move on fast, customer will not improve once they have your money!  If you research your options knowing the right process is there for you, you will be  on your way to success at stock trading before you know it.…

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Money Management – Without It You’ll Crash and Burn!

Money Management – Without It You’ll Crash and Burn!

Successful traders need to be good at so many things.

They must know when to enter a stock.

They must know when to exit a stock.

They must master their mental game.

Then, why is it that so many traders neglect money management?

Money management is just as important to your trading as knowing when to enter and exit. Some people think it is even more important! A trader without good money management is an accident just waiting to happen.

You might be a great stock picker but at some point your luck will run out. Without good money management one bad trade can blow out a profitable winning streak! No one is exempt from this. A good trader will always take the time to work out the maths behind each trade.

Before you enter a trade you should:

1) Write down your entry price.

2) Write down your stop price.

3) Write down your profit target price.

4) Apply a money management plan!

A money management plan is needed, so if you get stopped out of a trade the loss will not wipe you out!

Successful traders approach trading no differently to a business. Every good business uses a budget. Every good business has profit forecasts. Why should trading be any different? A business like approach must be adopted to stay in the trading business.

Amateurs tend to think of each trade as an isolated event. An amateur might receive a stock tip. The stock recommended is set to soar! The first thing the amateur does is reach for their piggy bank. Without looking inside they have no idea how much they can afford to invest. The amateur will often dump everything they can into that one stock. They are looking for the home run!

Gurus do things differently. For them, each trade is not an isolated event. Before starting to trade they have worked out how much capital they can devote to their trading business. There is no way they would dump their entire portfolio into one “good” stock. Instead they may allocate a percentage of their portfolio to this stock. Every trade they make is considered within the context of their entire trading portfolio.

To survive and prosper in the business of trading you must master the skills of money management. You must do the maths behind each and every trade. Without money management don’t be surprised if you crash and burn!…