Having been trading stocks and options in the capital markets expertly throughout the years,I have seen lots of ups and downs. I have seen paupers become millionaires over night … And I have seen millionaires become paupers over night … One story told to me by my coach is still engraved in my mind: ” Once,there were two Wall Street stock market multi-millionaires. Both were very successful and decided to share their insights with others by selling their stock market forecasts in newsletters. Each charged US$ 10,000 for their viewpoints. SYSTEMS & MORE One trader was so curious to know their views that he invested all of his $20,000 savings to buy both their viewpoints. His pals were naturally delighted about what the two masters needed to state about the stock market’s instructions. When they asked their buddy,he was fuming mad. Baffled,they asked their buddy about his anger. He said,’One said BULLISH and the other said BEARISH!'”. The point of this illustration is that it was the trader who was wrong. In today’s stock and alternative market,people can have different viewpoints of future market instructions and still revenue. The distinctions lay in the stock selecting or options method and in the mental attitude and discipline one uses in carrying out that method. I share here the standard stock and alternative trading concepts I follow. By holding these concepts securely in your mind,they will guide you regularly to success. These concepts will help you reduce your danger and enable you to examine both what you are doing right and what you may be doing wrong. You may have checked out ideas similar to these prior to. I and others use them since they work. And if you memorize and review these concepts,your mind can use them to guide you in your stock and options trading.CONCEPT 1. SIMPLICITY IS PROFICIENCY. Wendy Kirkland I learned this from},When you feel that the stock and options trading technique that you are following is too complicated even for basic understanding,it is probably not the best. In all aspects of successful stock and options trading,the simplest methods frequently emerge triumphant. In the heat of a trade,it is simple for our brains to become mentally overloaded. If we have a complex method,we can not stay up to date with the action. Easier is much better.CONCEPT 2. NOBODY IS OBJECTIVE ENOUGH. If you feel that you have outright control over your feelings and can be objective in the heat of a stock or options trade,you are either an unsafe types or you are an inexperienced trader. No trader can be absolutely objective,especially when market action is uncommon or hugely erratic. Just like the ideal storm can still shake the nerves of the most experienced sailors,the ideal stock market storm can still unnerve and sink a trader very rapidly. For that reason,one must endeavor to automate as lots of critical aspects of your method as possible,especially your profit-taking and stop-loss points.CONCEPT 3. HOLD ON TO YOUR GAINS AND CUT YOUR LOSSES. This is the most important concept. The majority of stock and options traders do the opposite … They hold on to their losses way too long and enjoy their equity sink and sink and sink,or they get out of their gains prematurely just to see the cost go up and up and up. Gradually,their gains never cover their losses. This concept requires time to master appropriately. Contemplate this concept and examine your previous stock and options trades. If you have been unrestrained,you will see its reality.CONCEPT 4. HESITATE TO LOSE MONEY. Are you like many newbies who can’t wait to jump right into the stock and options market with your cash wanting to trade as soon as possible? On this point,I have found that many unprincipled traders are more afraid of missing out on “the next big trade” than they are afraid of losing cash! The key here is ADHERE TO YOUR METHOD! Take stock and options trades when your method signals to do so and prevent taking trades when the conditions are not fulfilled. Exit trades when your method says to do so and leave them alone when the exit conditions are not in place. The point here is to be afraid to discard your cash since you traded unnecessarily and without following your stock and options method.CONCEPT 5. YOUR NEXT TRADE COULD BE A LOSING TRADE. Do you absolutely think that your next stock or options trade is going to be such a huge winner that you break your own finance rules and put in everything you have? Do you remember what usually occurs after that? It isn’t quite,is it? No matter how confident you may be when getting in a trade,the stock and options market has a method of doing the unforeseen. For that reason,always stick to your portfolio management system. Do not intensify your anticipated wins since you may wind up intensifying your very real losses.CONCEPT 6. GAUGE YOUR EMOTIONAL CAPABILITY BEFORE INCREASING CAPITAL OUTLAY. You know by now how different paper trading and real stock and options trading is,do not you? In the very same method,after you get used to trading real cash regularly,you discover it very different when you increase your capital by 10 fold,do not you? What,then,is the difference? The difference remains in the psychological concern that comes with the possibility of losing a growing number of real cash. This occurs when you cross from paper trading to real trading and likewise when you increase your capital after some successes. After a while,many traders understand their optimal capacity in both dollars and emotion. Are you comfy trading as much as a couple of thousand or 10s of thousands or hundreds of thousands? Know your capacity prior to dedicating the funds.CONCEPT 7. YOU ARE A BEGINNER AT EVERY TRADE. Ever felt like a professional after a couple of wins and after that lose a lot on the next stock or options trade? Overconfidence and the false sense of invincibility based on previous wins is a dish for catastrophe. All experts appreciate their next trade and go through all the appropriate actions of their stock or options method prior to entry. Treat every trade as the very first trade you have ever made in your life. Never differ your stock or options method. Never.CONCEPT 8. YOU ARE YOUR FORMULA TO SUCCESS OR FAILURE. Ever followed an effective stock or options method just to fail terribly? You are the one who figures out whether a technique is successful or fails. Your character and your discipline make or break the method that you use not vice versa. Like Robert Kiyosaki says,”The financier is the asset or the liability,not the financial investment.”. Understanding yourself initially will lead to eventual success.CONCEPT 9. CONSISTENCY. Have you ever changed your mind about how to implement a technique? When you make changes day after day,you wind up catching nothing but the wind. Stock market changes have more variables than can be mathematically developed. By following a proven method,we are assured that someone successful has actually stacked the chances in our favour. When you examine both winning and losing trades,figure out whether the entry,management,and exit fulfilled every criteria in the method and whether you have followed it precisely prior to altering anything. In conclusion … I hope these basic standards that have led my ship of the harshest of seas and into the best harvests of my life will guide you too. Best of luck.
