DAY TRADING ELEMENTS
Posted: Fri Dec 07, 2012 10:35 pm
1. You can’t accept more risk than you are comfortable with – emotion is the enemy of the trader. Most of us are slaves to our emotion, which is why most traders break down despite the evident simplicity of trading. To be prosperous, you have to deal emotion, and the first step toward emotional domination is to not take a lot of risk than you are comfy with. The little you concern about the consequence of a trade, the brighter you will perform it.
2. Stops loss orders essential be used – one big loss can annihilate the gains of five winning trades. Success commands that you don’t take big losings, so apply stop loss orders. Once you are acceded in a trade, enter a stop loss order and stick to it. If your brokerage firm does not allow the ability to accomplish stop loss orders, then change brokers.
3. No one cares more about your money than you – only you actually care whether you attain money or not. Consequently, do not depend upon others to make you money; you’ve to take charge and recognize what is coming up. You can apply the skills of other people to help you make decisions, but ultimately, your success in the market will come down to what you do.
4. Unsuccessful person react, victors predict – the market doesn’t care about what happened in the past. If you’re applying publicly available information to make trading decisions, then you’re employing old information. The stock market advances what it expects to happen in the future, and not on what has already happened. Use what has occurred in the past to furnish clues to what may encounter in the future, but do not make decisions on information that’s widely known.
5. The share market isn’t fair – inside every stock, there are a small group of investors who acknowledge much the general public. They’ve an advantage, since they can better anticipate what a company will do in the future. To be successful, we have to work out what the investors with better information are behaving and then act the same.
6. Information is partial – the financial industry wants you to buy stocks. The brokerage firm that finance the companies, the newsletters that get paid to advertise company stories, the promoters that get paid to advertise stocks, the media that sell more advertisement in an up market and of course, the companies themselves all profit when stock costs become higher. The a lot of buyers, the higher prices go. Believe no one when making investing decisions, since everybody could have a bias. Only the market can not lie (though it can appear pretty stupid some of the times), consequently, believe what the market assures you.
7. Hard work doesn’t make profit in the market – you need to act hard to determine how the stock market works. You need to work hard to learn how to manage your emotions. You need to work firmly to determine discipline. However, the most money is made in a market that’s trending, one where there are lots of chances and it appears easy to attain money. As the market is not trending, it’s tougher to find chances. Acting harder when the going gets tough will cause you to take marginal trades. Accept the obvious trades, they are more expected to work.
8. Black boxes do not work – there are a lot of companies selling trading systems that as if by magic spit out buy and sell recommendations. The share market is like a flu virus; just when you believe you’ve it solved, it switches in to something else. So, systems as well must develop with the market. A system that worked in the past might not work in the future. Even so, what seems to always work is understanding how people behave. Learn that, and you’ll be able to begin to pick stocks in any market circumstance. More significantly, learn the art of trading well, acknowledging that you can’t forever be right, that you’ve to limit losses and let profits run and that you’ve to empathize what prompts people to buy and sell. Systems, indicators, and computer programs are merely instruments to help you make better decisions.
9. The share market is generally efficient – in reality, stock, futures, currencies and any other market that bears enough people trading them are usually effective. That means, most of the time you can’t beat the markets. To do better than the bulks, you’ve to distinguish positions where market efficiency is collapsing. That comes when the crowd is emotional or when small groups of investors are trading on private information. Generally, that’s most well found while stocks are trading abnormally in terms of cost and volume. Center your attention on abnormal behaviour while searching trading chances.
10. Discipline is all-important – you have to manage risk effectively, you have to apply stops loss orders, you have to always be anticipating high probability trading chances, you have to avoid taking a bit much risk and you have to allow winning positions run. The laws of trading are nothing if you do not accept the discipline to abide by them.
The very first sentence:
“Successful trading of the share market calls for a lot more than knowing what to buy or sell. “
In other words….
It’s NOT WHAT YOU TRADE, It’s HOW YOU TRADE IT!
http://www.daygains.com provides Nifty Future Tips, Equity Tips, Commodity Market Tips, Agri Tips, Equity Market Tips
2. Stops loss orders essential be used – one big loss can annihilate the gains of five winning trades. Success commands that you don’t take big losings, so apply stop loss orders. Once you are acceded in a trade, enter a stop loss order and stick to it. If your brokerage firm does not allow the ability to accomplish stop loss orders, then change brokers.
3. No one cares more about your money than you – only you actually care whether you attain money or not. Consequently, do not depend upon others to make you money; you’ve to take charge and recognize what is coming up. You can apply the skills of other people to help you make decisions, but ultimately, your success in the market will come down to what you do.
4. Unsuccessful person react, victors predict – the market doesn’t care about what happened in the past. If you’re applying publicly available information to make trading decisions, then you’re employing old information. The stock market advances what it expects to happen in the future, and not on what has already happened. Use what has occurred in the past to furnish clues to what may encounter in the future, but do not make decisions on information that’s widely known.
5. The share market isn’t fair – inside every stock, there are a small group of investors who acknowledge much the general public. They’ve an advantage, since they can better anticipate what a company will do in the future. To be successful, we have to work out what the investors with better information are behaving and then act the same.
6. Information is partial – the financial industry wants you to buy stocks. The brokerage firm that finance the companies, the newsletters that get paid to advertise company stories, the promoters that get paid to advertise stocks, the media that sell more advertisement in an up market and of course, the companies themselves all profit when stock costs become higher. The a lot of buyers, the higher prices go. Believe no one when making investing decisions, since everybody could have a bias. Only the market can not lie (though it can appear pretty stupid some of the times), consequently, believe what the market assures you.
7. Hard work doesn’t make profit in the market – you need to act hard to determine how the stock market works. You need to work hard to learn how to manage your emotions. You need to work firmly to determine discipline. However, the most money is made in a market that’s trending, one where there are lots of chances and it appears easy to attain money. As the market is not trending, it’s tougher to find chances. Acting harder when the going gets tough will cause you to take marginal trades. Accept the obvious trades, they are more expected to work.
8. Black boxes do not work – there are a lot of companies selling trading systems that as if by magic spit out buy and sell recommendations. The share market is like a flu virus; just when you believe you’ve it solved, it switches in to something else. So, systems as well must develop with the market. A system that worked in the past might not work in the future. Even so, what seems to always work is understanding how people behave. Learn that, and you’ll be able to begin to pick stocks in any market circumstance. More significantly, learn the art of trading well, acknowledging that you can’t forever be right, that you’ve to limit losses and let profits run and that you’ve to empathize what prompts people to buy and sell. Systems, indicators, and computer programs are merely instruments to help you make better decisions.
9. The share market is generally efficient – in reality, stock, futures, currencies and any other market that bears enough people trading them are usually effective. That means, most of the time you can’t beat the markets. To do better than the bulks, you’ve to distinguish positions where market efficiency is collapsing. That comes when the crowd is emotional or when small groups of investors are trading on private information. Generally, that’s most well found while stocks are trading abnormally in terms of cost and volume. Center your attention on abnormal behaviour while searching trading chances.
10. Discipline is all-important – you have to manage risk effectively, you have to apply stops loss orders, you have to always be anticipating high probability trading chances, you have to avoid taking a bit much risk and you have to allow winning positions run. The laws of trading are nothing if you do not accept the discipline to abide by them.
The very first sentence:
“Successful trading of the share market calls for a lot more than knowing what to buy or sell. “
In other words….
It’s NOT WHAT YOU TRADE, It’s HOW YOU TRADE IT!
http://www.daygains.com provides Nifty Future Tips, Equity Tips, Commodity Market Tips, Agri Tips, Equity Market Tips