Tens of thousands of traders make a good living from trading on the stock market. Many more make quite respectable part-time incomes with trading. But even more regularly lose money because they never took the time to educate themselves about the workings of stock trading, or they started trading with real money before they fully understood what they were doing.
The most important reason for failure as a trader is not the market. It's yourself. Once you realize that you are not really trading "against the market" but against your own weaknesses, you are on your way to become a successful trader. If you are afraid of risks, for example, or you hate to lose money, you will always tend to exit a winning trade long before it has reached it's full potential. And you will also tend to stay with a losing trade long after you should have let it go, because you hope it will turn around and you can't stand the idea of losing money.
To trade successfully you must learn to allow profitable trades to fully develop their potential. That needs a lot of self discipline. And you also have to learn to let go of a losing trade before it's too late.
Luckily there are a couple of techniques that can help you to do this. If you always go into a trade with a pre-set stop loss level, and you stick to that rule, you will always exit the trade before you can lose a lot of money. And if you never enter into a trade without a take profit already set, you will be able to patiently wait for the trade to mature to its full potential.
Your final important step is to get the necessary education and software. Many online trading companies can provide you with both. Learn how the markets work. Study the workings of technical and fundamental indicators.
Sign up for live stock prices and start stock trading with a demo account. Don't start trading with real money until you have learned the basics of trading - otherwise you are bound to learn very expensive lessons very quickly. - 2364
The most important reason for failure as a trader is not the market. It's yourself. Once you realize that you are not really trading "against the market" but against your own weaknesses, you are on your way to become a successful trader. If you are afraid of risks, for example, or you hate to lose money, you will always tend to exit a winning trade long before it has reached it's full potential. And you will also tend to stay with a losing trade long after you should have let it go, because you hope it will turn around and you can't stand the idea of losing money.
To trade successfully you must learn to allow profitable trades to fully develop their potential. That needs a lot of self discipline. And you also have to learn to let go of a losing trade before it's too late.
Luckily there are a couple of techniques that can help you to do this. If you always go into a trade with a pre-set stop loss level, and you stick to that rule, you will always exit the trade before you can lose a lot of money. And if you never enter into a trade without a take profit already set, you will be able to patiently wait for the trade to mature to its full potential.
Your final important step is to get the necessary education and software. Many online trading companies can provide you with both. Learn how the markets work. Study the workings of technical and fundamental indicators.
Sign up for live stock prices and start stock trading with a demo account. Don't start trading with real money until you have learned the basics of trading - otherwise you are bound to learn very expensive lessons very quickly. - 2364
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For more on the stock market grab this WallStreetWindow swing trading strategies guide written by Mike Swanson.
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