"Everybody wants to be rich", and you can become rich if you follow these share trading tips. But, if you don't follow these share trading tips, you'll probably end up broke. Also, If you ever lose money on a trade, make sure you understand why. Re-read these share trading tips and figure out how many of these share trading tips were ignored.
1.) Have a Definite Plan and Stick with It - You must take time after each trading day to analyze the action of the market, consider the technical and fundamentals, then plan what you will do the next trading day - buy, sell, or hold. Before the opening of the market each day, you must recheck your analysis from the previous day. Since, something new could have occurred over night.
2.) Do not Trade Impulsively - The biggest weakness of every trader is giving in to impulse trading. Impulse trading is basically gambling and can cause you to lose the largest amount of money by invoking your emotions of fear, greed and inability to recognize you made a bad trade. Successful traders know they will make bad trades from time to time. But they never hold on stubbornly to a losing position. They try to keep their losses small.
3.) Look for Special Situations - Avoid low volume trading shares. Why waste your time and tie up your funds with inactive shares? Instead, look for shares that offer you an opportunity to gain at least 30% or more in only a few weeks. Usually, this means you must turn your attention away from certain shares you personally like and trade in shares that looks ready to move in a definite direction.
4.) Learn How to Sell Short - To make the most money from share trading you must be ready and willing to sell shares "short". Short selling is the selling of shares that the seller doesn't own. More specifically, a short sale is the sale of a security that isn't owned by the seller, but that is promised to be delivered. In fact, you can make more money faster selling short than you can by going long.
5.) Never Sell A New High - If the market keeps making new highs, there are good reasons for it. It's smarter to be "long", bet on shares rising, and go with the up trend than try to go "short", betting on shares falling, and fight against the trend. There's no way of knowing how high the market may move against you. Wait a few days for a definite indication of a reversal in trend. It might be several days or weeks.
6.) Never Buy A New Low - If the market keeps making new lows, there are good reasons for it. It's smarter to be "short", bet on shares falling, and go with the down trend than try to go "long", betting on shares rising, and fight against the trend. There's no way of knowing how low the market may move against you. Wait a few days for a definite indication of a reversal in trend. It might be several days or weeks.
7.) Trade Only with Funds You can Afford to Lose - If you can't afford to lose whatever money you have, you will find it almost impossible to win. The reason is you won't be able to follow the tips given in this article. And, if you fail to follow these tips, you probably won't make any profits.
8.) Cut Your Losses and Let Your Profits Grow - This is the most important tip. It's also the hardest to follow. But you must embrace this tip or you'll never become rich from trading. Few traders have the discipline to take small losses. If you are one of the few who can do this, you have a very good chance of becoming an elite trader. When most traders make a trade, they believe they're correct. If the market moves against them, they stubbornly hold on. They hate to admit they're wrong. Even when their loss grows larger, they refuse to take that loss and get out. They hope the market will turn around soon and prove them correct or at least move back to reduce their losses. But, more times than not, the market does not return to that level. When you place your order to buy or sell "short", you'll usually know whether you are right or wrong before the week is over. If you are wrong and the trade you made shows a loss of 20% or more, you should get out before the close of the market that day. Taking such a loss takes a lot of courage.
Finally, make sure all of the Share Trading Tips are pointing in the same direction, up or down. If your financial mentor also agrees, then you have a good chance of making a successful trade.
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