photo credit: Paul Keller
Making money in the market means using a sound trading system and having the nerve to stick with it. Here are a few suggestions:
Know what you want before trying to find a trading system. Write down your requirements. Narrow your focus.
For example, how much time can you devote to trading? Can you handle nightly research of the market and stocks to find new trades?
Find one trading system you understand and become an expert at using it.
A frequent mistake is trying too many systems and not mastering any of them. Find a system you understand. Give it at least 6 months. Paper trade it to build your confidence.
Become an expert.
Consistently fine-tune the knowledge of your trading system. For example, focus on finding the best stocks to trade. Or maybe concentrate on making the best entries. You’ll learn to trust your system or spot the weaknesses that need fixing.
Walk before you run.
Become a master instead of a “pretty good” trader. Maybe this means you only trade long. It’s easier to trade long. I don’t think we’re programmed to wanting a stock to decline in price. That’s an extra step to learn and accept.
Practice your technique every day and you’ll get better faster.
Before you begin, know that practice will make you better. Know how much practice time you will have every day to perfect your skills.
You can do it!
I think the biggest decision is knowing what you want from trading. Maybe you just want to track the overall market, keep track of your current investments,or double-check the validity of a financial adviser’s recommendation.
Knowledge is a good thing. A little effort devoted to understanding a trading system can bring you peace of mind, confidence, and financial rewards.
