Trade Plan - Six Mistakes New Traders Often Make

Six Mistakes New Traders Often Make

By Gilbert Wong

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 market.

Margin Trading - Crazy Risks, Crazy Rewards

By D. Alan Carter

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

Margin Trading - Loaded For Bear

Margin Account - Now You're Loaded For Bear

By D. Alan Carter

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...

Margin Trading - The Margin Call

Margin Call - "Honey, The Phone's For You"

By D. Alan Carter

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 have you...

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.

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