Best Stock Trading Advice for Greenhorns and Pros Alike

Traders on all levels can benefit from the advice of colleagues or peers in the financial markets.  Successful trading involves continuously educating oneself about the new technology available and fine-tuning one’s insight and understanding of the ever-changing markets.  The stock market is a sophisticated playing field with high stakes and ever changing methods and the need for keen hindsight as well as foresight.  Successful mentors can be of great assistance, as can the knowledge that the stock market puts you up against well-versed individuals that know and understand the market logarithms and algorithms.  It may not be a simple venture, but with the insight and mentoring of successful traders it can be profitable and rewarding.  Numerous ‘top-notch’ traders that are highly seasoned and successful with the stock markets can offer a plethora of advice to new and advanced traders alike.

Stock Education and Planning

The ability to educate oneself and maintain a level of updated and current knowledge and understanding of the market, from valuable tips to current trends will be of utmost benefit for trading success.  At any given time, a change is taking place in the financial/political markets. That change could be the key to profit.  It is crucial to stay abreast of factors or events that impact the market and take advantage of the opportunities that are out there.  Traders should conduct their business and make critical financial decisions with clarity, always.  Find a comfort zone – choose times when you are clear and stress-free, develop a comfortable area in which to work, limit the size of your trades to levels that cause you no undue stress or fear, and venture into markets for which you have an educated understanding.  Develop a strategy and master it – there are many strategies but traders must identify a method that they find comfortable and stick with it.  Have a structured plan from entry to target to stopping point.

Traders should always know something about the commodity by keeping up with news sources and current information, set a profit goal, and know when you will cut your losses and stop.  Learn from your own successes and mistakes with self-analysis.  By conducting a ‘post-trade’ assessment, even keeping a post-trade chart, you may more readily identify good decisions as well as errors.  Always learn from your past and apply the lessons to the present trading scenarios.  Exercise discipline and patience as you continue to learn and stay abreast of new methods and technology.  Stay focused and determined, even in the face of a loss.

Advice of the Pros

Taking advice from those who have found their own keys to financial success and trading profit is a great way to broaden your horizons.  Of course, tease out the practices and suggestions that you are most comfortable with and move forward with confidence.  Additional tips from some well-versed trading pros include a variety of pointers and approaches that could improve your trading game!  Start with some advice on cutting losses – numerous traders will tell you to cut your losses and cut them quickly.  Although losses are part of trading, one should always limit losses and when you do encounter them, accept them and move forward.

Part of minimizing loss and investing without fear would be to employ a good risk management plan.  Have that stop, or point at which you know you will exit, pre-determined and be self-disciplined enough to act upon it when you need to act upon it.  Do not attempt to ‘fight’ the market, for the market will inevitably win, and if it is time to get out then get out.  Be patient and avoid rash decisions like selling something that shows profit or hanging on to something that shows loss.  Your expectation in position sizing and your ‘risk to reward’ ratio are a critical part of your plan, as well.

Understand what some call the “15 Minute” Rule – which is that if your stock surpasses the high in the first 15 minutes, it is likely to keep moving up for the day, and vice versa if your stock fails the low in the first 15 minutes, it is likely to continue downward for the day.  The caution here is that is your 10-day expected movements must have a slope (cannot be flat) for the 15 minute rule to hold true.   Some of the seasoned pros in the stock market arena may tell you to minimize your emotions and never purchase high and then relinquish low – basically don’t panic but if it doesn’t feel right, you might want to remove it.   Maintaining your capital is just as important, even more so, than seeing capital appreciate.  Never buy on margin, follow the trends, and always be ready to adapt to the change because inevitably there will be change.

What do you think of this financial article? What are your thoughts on capital appreciation? Feel free to comment below.