Newbie Do's & Don'ts

[brianlee]

10 Winning Investment Tips



1. Don't open a trade just because it is cheap. The only reason to open a position is when the underlying security looks set up to make a decent move.

2.When you open a trade, start looking for signs that you were wrong. If you see them, then get out before your stop loss is executed.

3. Good trading should be boring, like doing the same thing over and over again. If there’s one thing I guarantee in trading, it’s that "thrill seekers" or adrenaline junkies get their accounts grounded into tiny bits and pieces.

4. Always be in control and aware of your own sea of emotions. Every trader’s downfall will come from not being able to control your emotions. If you are screaming at your computer screen, begging your stocks to move in your favor, you have to stop and ask yourself, "Is this rational?" Ease in. Ease out. Keep your stops. Don’t scream and shout.

5.The turning point of when amateur traders turn into professional traders is when they stop searching and hoping for the "next great technical indicator" and start managing their risk on each trade.

6. Trading is simple, but it isn’t easy. If you see yourself having a future in this industry, forget about "hope" and stick to your stop loss.

7. You are buying and trading on the emotions of other traders, not the actual stock. You have to be aware of the human psychology and emotions that constitute trading.

8. Always remember, trading is supposed to be a business. So treat it like one by not letting your emotions get in the way, stick to your stop loss.

9. If you come into trading with the idea of making “big money overnight,” you’re better wake up and smell the coffee. Most accounts have been blown because of this “account killer” mindset.

10. Beware of your number one enemy, yourself! If you start to get too excited, beware! As excitement clouds your judgment, it starts to increases your risk.

Cheers & Happy Trading!

Brian Lee