Stick to your boundaries

March 18, 2015 by
Image courtesy of Stuart Miles at freedigitalphotos.net

Image courtesy of Stuart Miles at freedigitalphotos.net

Some important elements to your stock trading plan are the stop-loss (S/L) and take-profit (T/P) points. A successful stock trader will have planned what price they are willing to pay and sell at. If you don’t know these points it wouldn’t be prudent to invest.

The point at which a trader will sell a stock and take a loss on the trade is called a stop-loss (S/L). Conversely, the price at which a trader will sell a stock and take a profit on the trade is called the take-profit (T/P) point.

If you don’t stick to these points in trading then in most cases you are rolling the dice and hoping for a good outcome. Be a successful trader and establish your S/L and T/P points then follow them. You will be a better trader for it!

Do you stick to your S/L and T/P points?  If so, click the like button.

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Don’t hit the panic button!

March 11, 2015 by
Image courtesy of Stuart Miles from freedigitalphotos.net

Image courtesy of Stuart Miles from freedigitalphotos.net

The stock market goes up and down.  You can bet on it.  Kind of.  When you have made a trading plan that takes into account your risk tolerance, stick with it.

It can become difficult when the market is not going in the direction that benefits you but a well constructed trading plan should be carried out.  Trust your instincts from when you were in the planning stage, not the emotional state the market can put you in.

For an additional article on the importance of following your plan, click here for Don’t Lose The Trade Before You Enter It.

Please share your experience when you stayed with your trading plan when you began to panic.

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Looking back to go forward

March 4, 2015 by
Image courtesy of renjith krishnan from freedigitalphotos.net

Image courtesy of renjith krishnan from freedigitalphotos.net

History tends to repeat itself. So when you develop your stock trading plan it is imperative you “back test” your plan to see how it would have performed in the past. It should be tested in both bullish (increasing) or bearish (decreasing) markets to determine the plan’s performance. Back testing can display the risk you are taking with your money. Once you have a solid plan, you can change one rule at a time to see if you can improve performance. But remember you have to back test the changed plan in all different types of markets, all over again. It is a great way to “dial in” your plan by attempting to lower your risk and increase your rewards.

Click like if you have a trading plan.

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Test the water before you jump in.

January 28, 2015 by
Image courtesy of by tratong from freedigitalphotos.net

Image courtesy of by tratong from freedigitalphotos.net

Paper trading allows you to swim in the sea of the stock market without risking any of your money.  It allows you to try out trading strategies for FREE!  These accounts will use the current stock market conditions to reveal your results.  This is a fantastic tool to help you develop a written trading plan and get prepared to fund your stock market trading.

A word of caution, paper trading can seem very easy since there isn’t any real money on the line.  If you don’t take it seriously and simulate trades that you intend on executing, it will be a waste of time.  Wade slowly and tread carefully.

Have you used paper trading and has it helped improve your trading?  Please comment.

 

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