Category: Trading / Investing
A look at Individuals who have given up in the markets trade lack an edge, a sort of stock trading secret tip off that helps to leverage the trading platform to work in their favour. Any reference to the investment in stock industry is usually on a friendly chat or seeking advice from a expert for ideas in investment, the first remark will be about caution in opposition to losing money. To certain extent the first remarks are true due to the greed that comes as investors are hunting for a rich harvest without much planning. The stock marketplace is a good opportunity to prosper especially if you are aware of some of the stock trading secret tips.
One stock market place analyst was responding to a question as to which is the best stock trading tricks and techniques by saying (Little jovially of course) “Buy when it is low and sell when it is on a high”. But jokes aside there is some truth in that expression about stock trading. But to know what is low and what is high, it takes some Minor calculated risk, good amount of reading and some experience in the discipline.
Basically there are three sorts of investors; the Day trader who buys the stock during the business hours of the trade and sells them for a profit or a loss before the closing bell of the same day. Then there is the second one who buys stocks, pays for them and sells them for a high within a short span of time; called a short-term trader. The third lot is like a visionary, who buy those stocks which they think are like thoroughbred race hounds which will win long races and bring them good profits following a year or two. But on what stock trading secret information you will apply to select which category you want to invest calls for some planning, reading and experience as mentioned earlier.
Any government policy alterations in a sector or an industry will have a positive or negative impact immediately in the stocks of those companies dealing with that industry or sector. Oil market place companies stocks will soar high with news about the Authorities proposing to hike the costs in a day or two. The Day trader will make some quick revenues by acting on this news by buying on a sign of the upswing in the selling price of the stock and will sell when he thinks that the industry will not go any further than that on that day. This calls for a good control of your urge to wait for a further raise in the price tag. If the stock you bought soared two to three percent on that day, then that is the best time to sell them and wash your hand of that stock for the day. To fix your mental target as to when you will sell what you have acquired in a day trade is the stock trading secret of the day trader.
Sifting through the experts comments, content articles in business weekly, business channels, e.t.c., about the progress and possible direction a particular stock item will swing, will give the short-term investor opportunity to buy those stocks and say about one or two week immediately after the stock will reach that point which he envisaged about and what the experts advised about. The short term stock trading secret is to sell half of such stocks bought and to sell again when the it hits the next high within a different one or two weeks.
The in depth research about a company, its imaginative and prescient of the future, the leading team of the company and their position in the industry will make a long term investor to buy those stocks and wait even if in between there is a downward trend in those stocks. Eventually the wait and the effort for the research pay rich dividends as well as some good earnings margin when he sells them later in parts like in short term trading. Go ahead and make a good investment today in stocks.
These three steps will set the ground work for success with your day trading account. Many beginners simply start trading by funding a forex account. That’s a sure way to blowing up your account. Do the preparation correctly, and you’ll save yourself a lot of trading capital.
Planning your strategy is vital to long term success in the markets. Prepare a detailed written trading plan that will become the blueprint for your success as a forex trader. This is a working document that you will refer to regularly and make occasional adjustments to occasionally. Include the following core components to your plan:
• Overall beliefs about the market and how you are going to trade.
• Instruments traded and time frame. Choose the currency pairs and time frames to meet your needs.
• Entry Rules. These should be a precise set of rules that must occur before you can enter a trade. The rules must be concise and direct with no room for objective observations.
• Exit Rules. Exit rules are extremely important. Your entries will be useless if you do not have a definite set of exit rules. Include three types of exits: Initial Stops, Trailing Stops and Profit Targets.
• Money Management. Strict money management rules are vital. Work out exactly how much risk you are prepared to take per trade, what your maximum draw-down will be and how you are going to calculate your stops. Solid money management will ensure consistency.
• Contingency plan. What are you going to do if a worst case scenario occurs? Write down possible disasters such as a power outage, or your broker’s platform crashing and devise solutions for each. This way when a disaster occurs, you’ll know how to handle it.
Once your trading plan is in place it’s time to build your forex trading strategy. There are two major phases that need to be done to complete the building step.
Phase. 1. Enter the trading rules as per your plan into the desired trading platform or software program. Choose the forex pairs or financial instruments that you selected in your trading plan then apply the appropriate time frame, indicators, instruments and expert advisers (EA’s). Set up the default trading size and stop losses into the system.
Phase 2. Once you are satisfied that your forex trading system will meet your trading plans and objectives, it’s time to test it. Testing is vital to determine the possible success of your forex trading system. You will need reliable historical data to test your system in order to ascertain its performance ratio accurately. You may need to make adjustments to your plan if you are not satisfied with the results of your back-testing. Remember to test your system in different market conditions and be careful not to over-optimise. Historical results do not guarantee future returns.
In order to turn your auto trading system into a consistently profitable trading program you should take the final step of automating it. By planning and building your own system you now have a strategy that will suit your needs. By automating your system you will ensure that it is implemented accurately, efficiently and consistently. Automation takes out the emotional aspect of trading that hinders so many traders.
In order to identify the true success of your trading plan it needs to be traded in a live market environment where all the signals that it gives, all the stops it triggers, and all the position sizes it recommends, need to be adopted 100% of the time. It is very unlikely that a manual trader is able to achieve this. However, an automated trading program using high quality trading software will. By following your system closely with error free trading you increase your probability of success.
Build your own automation by using the scripting language of your preferred platform (MQL4 and Ninja script are popular choices). This will ensure that you have a strategy that will suit your needs and fit your plan perfectly.
By planning, building, and automating your trading program, you are increasing the probability of your success in the markets and ensuring that it will be implemented profitably and consistently.