A List of Stock Market Trading Basics
I have always said that making money in the market is easy.
It is learning how not to lose money that is the hard part of trading. To that
end when you find yourself in the surprising and often disturbing position of
having made a whole lot of profit, or more profit than you expected in a very
short time and you are feeling overwhelmed. This is when you need to remember
some basics.
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Here
is a list of Stock Market Trading Basics:
1. Stop
trading for at least a few days to a week. This sounds ludicrous, but my
experience with Students is that those who follow this rule keep their big
gains, and those who do not lose them back to the market and then some. The
reason behind this is emotion. You are in a state of emotional flux, and are
not thinking logically. You are thinking I'm brilliant, I'm invincible, I am
going to be rich! Well sure, but not at this moment. At this moment you are
overly exuberant, irrational, and not trading wisely. So take a few days to
cool off. The market is not going anywhere, and great trades will present
themselves over and over again. There is no end to the trend of good picks,
with a lull in the market and then good picks again. The primary factor in
making money and keeping it depends upon the ability to stop
trading and getting yourself under control again.
2. While
you are recovering from the shock, and yes it is "shock and awe time"
for most beginners as well as veterans when this happens, you need to do a
couple of homework assignments. First go back to your training course, trading
books, or educational resource to review and re-study the material again.
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is "The Gold Standard in Stock Market Education." Go to the
TechniTrader.com Learning Center and watch the Basics of the Stock Market for New Investors and Beginning Traders webinar lessons, to
experience for yourself the excellence of TechniTrader education.
3. The
next step is to write down your goals, set your established self-worth income
and then try to increase it. Traders are their own worst enemy. You
are not battling the market, or the Market Makers, or other traders. You are in
battle against yourself. Every single person on this planet has a self-made
invisible ceiling for the income level at which they feel comfortable. This
subconsciously sets income "roadblocks" and keeps people from making
more money, and it causes them to lose money in the Stock Market. The reason is
"fear of success" which is too much success too fast creates panic
and fear, because you are then utterly out of your comfort zone. If you really
truly want to be successful in the market, you must have written goals. These
goals must be very specific and detailed. You must define your comfort zone,
and continually push the parameters upward to increase your ability to make
more profits. Otherwise you will stagnate, and not increase profitability.
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4. Most
people refuse to do the goal writing because of "fear of failure."
They are so afraid that they are not capable of reaching those goals that they
do not try. Try to write down realistic goals and adjust them as you see the
need. Once you do the task of setting goals, you will find that well “Wow!” You
do achieve your goals, or most of them.
5. Trading
is 50% skill, with understanding your trading style and using proper strategies
for the current market condition. The other 50% is controlling emotion which
includes goal setting, keeping centered and calm, using discipline in your
trading rules, having the determination that you will keep working until you
are successful, maintaining your personal parameters while expanding them, and
using logic rather than emotion. These are the major components of making money
and keeping it.
View
a variety training webinars to help learn the Stock Market Trading Basics
and improve your trading in the Stock Market.
TechniTrader
is "The Gold Standard in Stock Market Education." Go to the
TechniTrader.com Learning Center and watch a wide variety of webinars, to
experience for yourself the excellence of TechniTrader education.
Go to the TechniTrader
6. Most
beginners do not allow themselves enough time to learn, explore, and discover
their trading style and then learn to apply the trading strategies. They rush
their paper trading and practice aspect, as they become impatient or greedy.
7. Most
traders become complacent and do not set high enough goals, OR they lose their
patience and rush to try every new gimmick that they hear about rather than
sticking to a set of rules and parameters that they work to improve every day.
Summary
Impatience
is a trader's worst enemy. At some point in time if you stick with it and work
to improve, at some point you will be profitable and often beyond your
expectations. When that happens, get this article out and read it again.
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Trade
Wisely,
Martha
Stokes CMT
Chartered Market Technician
Instructor and Developer of TechniTrader® Stock and Option Courses
TechniTrader DVDs with every course.
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