Six Mistakes New
Traders Often Make
Many new traders often fail to make money in
the stock market in the beginning. Often times
they blowout an account in a few months and
walk away sad and empty. This is because they
failed to follow a set of rules. Use the rules
below to increase you success in the stock
By D. Alan
If you've ever taken out a loan, you've
already received a glancing education in
trading on margin. Margin trading, in it's
simplest terms, is trading with borrowed
capital. The lender in this case is your
broker. You are, in effect, borrowing money
from your broker to buy stocks. As with any
cautious lender, there will be a demand for
By D. Alan
Trading on margin first requires
setting up a margin account with a
registered securities broker, or transitioning
an existing cash account into a margin
account. Before taking that step, you
should fully understand, and be comfortable
with, the inherent risks associated with a
margin account. Among them...
By D. Alan
This is one phone call you're going to wish
you didn't have to take. But take it you must.
It means you've lost money on one or more
stocks. So much money, that you've tripped the
"maintenance margin" percentage and your broker
is exercising his contractual rights to
Having too much Risk per Trade - Money Management Any
one trade can wipe you out. Determine how much you are willing
to lose on each trade and don't have a position size larger
than that. No matter how good the trade looks keep to the
position sizing. Capital preservation is the number one thing
that will keep you in the game.
Using too many Indicators Every indicator is
calculated slightly different so some will give a buy signal
while others are giving a sell signal. It's rare for all
indicators to plan in the same direction. Having too many
indicators can led to "Analysis Paralysis." Remember, price
always trumps any indicator.
Neglecting to use a Trade Journal A properly recorded
trade journal is the best thing for a trader. By writing past
trades down, you will learn what works and what doesn't.
Using Mental Stops Often new traders will lower their
original mental stop resulting in a larger loss. Use mechanical
stops or rigid stops to do the hard work for you. Place stops
immediately after entering a trade.
Undisciplined Trading Novice
traders impatiently takes trades at the wrong times and do not
follow a trading plan. Successful traders place trades when the
rules state so and exit when profit or loss targets are
reached. Never take a trade just to place a trade.
Trading without a Trading Plan A Failure to Plan is a
Plan to Fail. A good trading plan is absolutely priceless. Take
your time to develop a plan with clear entry and exit criteria.
This is the most important rule because it incorporates all the
rules mentioned above together.
Please visit my website for options strategies and
Article Source: http://EzineArticles.com/?expert=Gilbert_Wong