Ten Golden laws For securities Dealing Success
Your stock trading rules are your money. When you follow your rules you make money. However if you break your own stock trading rules the most likely outcome is that you will lose money.
Once you have a reliable set of stock trading rules it is important to keep them in mind. Here is one discipline that can reap rewards. Read these rules before your day starts and also read the rules when your day ends.
Rule one : I must follow my rules.
Naturally if you develop a group of rules they are going to be followed. It is human instinct to need to change or break rules and it takes discipline to act as agreed by the established rules.
Rule 2: I will never risk more than 3% of my total portfolio on any one stock trade.
There are several old traders.There are lots of bold traders. But there are never any old bold traders. Shielding your capital base is basic to successful stock exchange trading over time.
Rule 3: I will cut my losses at 5% to 15% when I am wrong without question.
Some traders have an even lower toleration for loss. The key point here is to have set points ( stop loss ) in the boundaries of your toleration for loss. Stay informed about the performance of you stock and stick to your stop-loss point.
Rule four : Never set price targets.
This is a style that will allow me to get the most out of rising stocks. Simply let the profits run. Realistically, I can never pick tops. Never feel a stock has risen too high too quickly. Be willing to give back a good percentage of profits in the hope of much bigger profits.The big money is made from trading the really BIG moves that I can occasionally catch.
Rule five : Master one style.
Keep on learning and improving at this one methodology of trading. Never jump from one trading style to another. Master one style instead of become average at implementing a few styles.
Rule six : Let price and volume be my guides.
Never hear any opinion of the stockmarket or individual stocks you are considering trading or are trading. Everything is mirrored in the price and volume.
Rule 7: Take all valid signals that show up.
Do not make excuses. If an entry signal shows up you haven't any excuse to not take it.
Rule eight : Never trade from intra-day info.
There's always share price difference in the course of any trading day. Relying on this info for momentum trading can cause some wrong calls.
Rule nine : Take time out.
Successful stockmarket trading isn't only about trading. It is also about emotional strength and physical fitness. Scale back the stress each day by taking time off the computer and working on other areas. A difficult trader won't make it in the long run.
Rule ten : Be a greater than average trader.
In order to succeed in the stock market you don't need to do anything exceptional. You simply need to not do what the average trader does. The average trader is inconsistent and undisciplined. Ask yourself every day, "Did I follow my method today?" If your answer is no then you are in trouble and it's time to recommit yourself to your stock trading rules.
Article Source: FxTradingStock.com
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Looking to find the best deal on what is a stock market, then visit my website to find the best advice on top 10 stock picks for you.
by: Johannes Spinoza
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Date: Tue, 8 Feb 2011
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