Your Sure Way to Lasting Success in Trading

Why is it that some people are successful in trading the markets? And why is it some people fail? Is it luck that determines if you are successful or not in making money from the market? Is it the system or strategy that a person use which determines their success?



A lot would say that it is the system or strategy that they employ which ultimately determines if they come out winning from the market.



Every system that exists on the internet will show you how to make money using it. Without a doubt, it will make money for you. The question is usually how much money will the system make for you. All the system that out there will show to you how their system has work base on historical data or activity and then at the bottom of the page there would be a disclaimer clause that states .. Historical data does not determine or guarantee future earnings....



So why is it that these sites or page include this disclaimer clause?



The disclaimer clause is incorporated in it because they know that there are certain elements which they can not control. Human emotions.



Human emotions are always the key to either success or failure in any business. And it is no difference when trading the markets. Read all the books about trading that you want, buy all the successful system that you want. If you cant control your emotions, you cant succeed in the markets.



Thats the reason for the disclaimers clause because the one thing that the author can not control is their subscribers or customers emotions.



In the market there are but only two main emotions that every trader will experience; GREED and FEAR. When this emotion appears it is not how we eliminate it but rather how we act on it. There are natural emotions that can not be eliminated. This emotions forces us to action, thus how we act on it will determine the outcome.



Like anger, when we are angry at someone, its either we say something nasty or we can just kick a bucket or we can just dive into a pool of water. Which ever action that we take, it produces a different outcome or result.



All too often when we begin to see two to three consecutive loses on our trading activities, we would begin to have doubt. When this happens we are already at the state of fear, we fear losing more of our money and thus begin to doubt that the system is working.



While no system is absolute, meaning no system will guarantee that you will make money ALL the time. The system seller would say that we would be able to make money consistently, provided we follow their system to the dot.



On the other hand, when we begin to see two or three consecutive we begin to feel on top of the world. We begin to feel that we can start making good money from the market and then start tweaking the system or maybe putting more money in the market to leverage our earnings or maybe begin to take on more positions, which ultimately make us deviate from the system which we were using. This is when greed has already stepped in to rule our thoughts.



There is saying The system is only as good as the person using it. So if we dont follow the system either with we are making loses or when we are creating profits. We would ultimately fail. And to follow the system requires discipline. The discipline to act on our fear and greed when it sets in, will determine how well we do in the market.



Once again discipline is the key. We must have the discipline to say I have reached my target. I should take profits now even though it may go higher when greed sets in. And when fear sets in one should say I have to take a position even though the market does not seem to be moving in my favor



While these are but two circumstances when greed and fears arises, there are, and will be many instances when we need to make a decision to either enter or exit the market. And these are very two most important decisions to take in order to succeed in the markets. The discipline to follow the system diligently no matter what happens to the market



So no matter how good the system is, the only and sure way is to lasting success in the market depend on the discipline to overcome our personal emotional to follow a particular system religiously.






Original pictures take http://doomcycle.com/tag/frazetta-friday/page/2/ site

You buy and price falls,you sell and price rises.

One say's "I bought "XYZ Company" at Rs.2200 and immediately after I bought the stock price dropped to Rs.2000." I feel sad. Another comes with a different version "I sold "XYZ Company" at Rs.2000 and it went up to Rs.2400 same evening" I made an imaginary loss of Rs.400 per share.



Solution:



You can buy more shares @ Rs.2000 and reduce your overall buying cost. This has to be done only if believe in the fundamentals,management and the future prospects of the company.



To do this you need to keep money ready.whatever money you have and want to invest,split it into two parts. Then keep 50% cash aside, only invest with other 50%.So if need to buy more of any stock when the price falls you have ready cash.



Also now if you have 200 shares of XYZ Company 100@Rs.2200 and 100@Rs.2000.Then the price goes up to Rs.2400. Sell only 100 of the shares.Then if the price further shot up, you have some shares to sell And participate in the rally to make money.



Next You sold the share and the price went up. The solutoion to this is never sell all the shares at one time.Sell only 50% of your shares.So if he price goes up later you still have the other 50% to sell and make profit.



The golden Rule is to first do your own analysis of the stock before investing and buy on tips. Also invest only in companies which declare dividends every year. To be sure that you are not investing in loss making companies.



Every Market expert advices to do your stock analysis before investind in the stock market.

But nobody tells you how.



Well in my next article I will write about how to do stock anaysis using various tools such as financial ratios and by checking the track records of the comapnies you plan to invest in.



P.S: If you are not Indian then replace the Rs. into your own local curreny to understand the artilce :)






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Winning Traders - What They Have In Common

We often hear that 95% of people who try trading for a living fail within the first year. These are not very good odds and it is natural for new traders to wonder if they have what it takes. In this issue, I give you a list of 20 characteristics I believe could be found in most winners. I also included some Truths about trading.



The methods employed by winning traders are extraordinarily diverse. Despite the broad spectrum of traders, certain characteristics are found in most winning traders (in no specific order):



- Winners have a trading plan with a strategy that incorporates effective money management. They have the discipline to execute their plan relatively flawlessly and the self esteem to accept the money the market gives them.



- They use their head and stay calm they dont get excited or depressed because of their trades. They dont act on emotions. They can handle success and failure without self-destructing.



- They dont trade to feel good or to get high.



- They handle trading as a serious intellectual pursuit.



- They always protect their capital because they know they cannot trade without it. This means that they dont get caught up in the thrill of the moment, the excitement of a running stock they dont jump into careless trades.



- They love trading, trading is a passion and they spend a large portion of their time trading and learning about trading.



- They know that sometimes the best thing to do is to do nothing (sit on their hands). They do nothing unless there is something to do.



- They dont pay attention to other peoples opinions, they make their own.



- They dont try to guess the future - they know it is a game of probabilities. They understand that they will always have a percentage of losing trades but they keep the losses for those trades small. They dont hesitate to get rid of a position when the loss is still small.



- They have a great respect for the markets and they never think taking money from it is easy.



- They behave like professionals. They take full responsibility for their actions and dont look for something or someone to blame. Instead they use their losses as an opportunity to improve their plan.



- They trade to trade well, not for the money.



- While they are in a play, they dont count how much money they have made or lost because they know this would influence their judgment. They focus on trading well.



- Amateurs keep thinking what trades to get into, while professionals spend just as much time figuring out their exits.



- When they have a winning position, they dont let their emotions dictate when to close the position, which would result in small gains. They know emotions cannot be part of the decisions.



- When they enter a play, they dont have any expectation. They understand it can go either way and that nobody can know the future.



- They have confidence in their plan, patience, and discipline.



- They are not afraid because they have developed attitudes that prevent them from getting reckless.



- They have self-monitoring skills and can continuously monitor their performance in order to improve it.





Some Truths about Trading



- The market is a huge crowd of people. Each member of the crowd tries to take money away from other members by outsmarting them. Everyone, including some of the brightest minds in the world, is against me and I am against everyone. Its every man for himself. The money I want to make belongs to other people who have no intention of giving it to me.



- The market is like an ocean, it moves up and down regardless of what I want. The market does not know I exist and I cannot influence it. I cannot control the market any more than a sailor can control the ocean, but I can control my own behavior.



- Trading is all about management managing myself, my money, my attitude, and my positions. It is not about predictions, forecasts or opinions.



- There is the plain fool, who does the wrong thing at all times everywhere, but there is the Wall Street fool, who thinks he must trade all the time. No man can always have adequate reasons for buying or selling stocks daily or sufficient knowledge to make his play an intelligent play (Jesse Livermore).



- Trading without imagination is like painting by numbers and is about as rewarding(William R. Gallacher).



- The market is not going to reward anyone for observing the obvious.



- A mistake made by many traders is that they become so involved in trying to catch the minor market swings (generating lots of commissions in the process) that they miss the major price moves.



- Advisors are only wrong when you get too many of them start thinking the same thing.



- A strategy to enter and exit trades will not help you unless you are both disciplined and organized.






Original pictures take http://visual.ly/what-type-trader-are-you site

Winning Stocks Always Leave Foot Prints

SIX STEPS and the IRREFUTABLE LAWS of the MARKET Every Investor and Trader MUST KNOW to Succeed



Step 1:



A move begins with the sponsors (smart traders) who have insider knowledge as it relates to a particular stock or market. This information will move a market up or down depending on the insiders' information. These buyers are smart, very smart, and recognize trading/investment opportunities very early in the markup cycle.



Step 2:



Days, weeks, or sometimes months after a move has started, there is a brief mention in the electronic media (radio, cable, TV) or on one of the internet chat boards that a market has moved. The public hears for the first time and begins to get interested, but does not buy.



Step 3:



A blurb of information appears in print media. The move also begins getting more exposure on blogs and internet message boards. The public starts paying a little more attention, and will buy a little bit.



Step 4:



Wall Street and LaSalle Street brokers go into full hype mode and hawk the market to their customers. The public begins buying in greater volume.



Step 5:



A full-blown front-page article appears about the particular stock or market in one of the major financial newspapers, magazines, or financial websites. This is often six months after the fact and after a market has shown its greatest appreciation. There is often heavy public buying, even a possible frenzy, as all media, brokers, and so-called "gurus" start to tout the market.



Step 6:



As step 5 gets underway, the sponsors or smart traders begin to move out of the market and take their profits off the table.



The finale: The move ends, the market falls, and investors lose money.






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Why Land Beats Stocks And Shares

As small investors look for ways to ensure a good return on their money, land sales are increasing in popularity. Profits, whilst not guaranteed, are often better than those from the stock market, for several reasons:



Less risk, more profit



Whilst some investors have a significant investment in the stock market, often with a comprehensive, well-managed portfolio, for most smaller investors, their experience of the market is limited to one or two companies and they are therefore more open to stock market fluctuations and risks. Company share prices can be affected by many external factors, often beyond the companys control and, unless you are watching the market carefully day by day, you usually have to hold onto your shares for many years in order to turn a good profit.



By contrast, if you select the right land, or take the advice of a reliable land agent, you can realise potentially fantastic profits in a much shorter space of time. This is because the land thats normally made available to smaller investors has been carefully chosen. Big land investors buy and then bank land that they think will be ear-marked for development in the future, and then either hold onto it, or parcel it up and sell it to private investors, who reap the benefits if planning permission is granted at a later date.



No maintenance required



Once youve bought your piece of land, you own it outright and can sell it whenever you choose. You dont need to maintain it as you would a property and you dont need to follow its fortunes day in, day out, to find out whether youre making any money. If you need to raise money, you can sell your land quickly, whereas if your shares are at a low price, you wont be able to make enough cash.



The best of both worlds



If you have thought of investing in land, but dont want to get out of the stock market completely, then just broaden your portfolio by reducing your shareholdings and investing in land as well. You get the best of both worlds, and the chance to make a very health profit if you choose the land wisely.






Original pictures take http://banking.about.com/od/loans/fl/Basics-of-Construction-Loans.htm site

When To Sell Penny Stocks

Penny Stocks can be a very effective way to provide you with a secondary income. They can be used to create passive income because they do not require you to be constantly watching over them. The problem that most people have when it comes to stocks is - not knowing the right time to sell.



Penny Stocks can rise very quickly but they can also fall quickly too. The reason that most investors hold onto a stock is because the fail to separate their emotions from their actions.



All of your penny stocks buying and selling should, of course, be based on sound research both of the market and the companies recent history. How the company is doing in terms of profitability, whether they are just about to, or have just announced profits, losses or new patents, discoveries and products, can all affect your decision on whether, or not, to buy.



Knowing the right time to sell your penny stocks however can sometimes seem, as much an art as a science, although getting it wrong can be fatal. Many people seem to put all their research efforts into knowing what penny stocks to buy and when to buy them.



Investors seem to forget about researching to sell stocks. Instead, they let their emotions take control and sell at the wrong time. Investors selling at the wrong time fall into two categories. These categories are, The Runners and The Sitters.



The Runners like to take profit way too early. They see their Penny Stocks rise a little and sell because they dont want to risk too much. Ive seen it time and time again; these people set out to earn a 25% Return on Investment and end up taking profit at 1%. Someone who takes profit twice at 25% earns a lot more than someone who takes profit twice at 1%. Usually, as soon as they sell a penny stock, it will rise even further and theyll be wondering why they sold so early.



The Sitters are the heavily emotionally involved in their penny stocks. They are gamblers at heart and just do not want to let go of a losing position because it could bounce back any day now. When they do let go of their Penny Stocks - there is virtually nothing left. The sitters like to sit on a losing position. They like buying but dislike selling.



Do you want to be a Runner or a Sitter? Well, I hope you are neither. You want to be a winner. A winner will separate their emotions from their investment thinking and will also research when buying and also when selling. They will buy and they are not afraid of selling.



There is great deal of profit to be made from trading in Penny Stocks. But you have to know not only what to buy but also how long to keep it and when the best time to sell. The answer, as with most things in the world of finance, is good information and research. But that doesnt end when you buy. Find out why your penny stocks are rising and this will put you in a much better position to know when to sell.






Original pictures take http://everythingfinanceblog.com/5058/an-infographic-guide-to-penny-stocks.html site

Wealth Is Made By Focusing In Stocks

STOP.



STOP trying to create the perfect trading system. There isn't one.



Phew..what a relief. Stop spending all those hours creating more and more trading rules and realize this:



Money creation in the stock market is made from CONCENTRATION. That's right. Trading the very best stocks atthe right time with enough capital to make a big difference.



You must go from wealth CREATION to wealth maintance in this game. Unless you plan on "investing" for the next 25+ years and building wealth slowly.. this is my plan of how you can make millions in the stock market:



In Darvas's book "How I Made $2 Million..."



How many looked at his position sizing? In his early trades Darvas only trade 1 or 2 stocks at any one time on MARGIN! Only when he got upto over $500,000 did he start diversifying a little. Most people overlook these facts.



MY Momentum Stock PLAN:



CONCENTRATION BUILDS WEALTH DIVERSIFICATION MAINTAINS WEALTH



END GOAL:



$2 MILLION+ ACCOUNT MAKING 20-30% P.A



Start with:

$50,000 Trade 2 stocks with half capital in each.



RISK Per TRADE = 5%



When at $100,000 Trade 3 stocks with 1/3 capital in each.



Risk Per Trade = 3%



When at:



$500,000 Trade 5 stocks with 1/5 capital:



Risk Per Trade = 2%



When at $2 Million Trade 8 stocks with 1/8 capital:



Risk Per Trade = 1.25%



You first have to create wealth in order to maintain it. Whilst trading only two stocks at a time may be deemed to risky by the professionals you must be very selective on the stocks you trade. Quality beats quantity. Especially when you concentrate so much.



This is the only way a small account can break into the big time. You must not only focus your efforts in the early stages but you must also onlytrade the top 0.1% of stocks in the marketand get yourtiming SPOT ON.






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