Stress Free Finance

Patience, timing, and money are the prime requirements for becoming a successful stock trader. Anybody can try his luck in the markets provided he has money to open a brokerage account. There are lot of opportunities and profits or losses as there is volatile action same as gambling. To excel and grow one needs a strict trading discipline or experience in trading the markets. Provided are some tips which would help you survive in the trading market, as only survival can leed to sucess.

Successful stock trader needs to commit more time and be more dedicated than a general investor because of the simple reason that trading is a profession where competition is very fierce among a large no. of market wizards whcih makes investing in the market that much more risky. Losses happen and ond should be prepared for that but amateur participants can be successful only if they formulate certain trading rules and adhere to them.

Many traders lose their trading discipline when they suffer a loss instead of making a profit. They become anxious, unnerved and let emotions play a part; their decisions are no longer rational and their losses mount as the traders strive to recoup. As one of the notable traders of the last century said, traders, especially amateurs, should keep the emotions of fear, hope and greed at bay.

Weather a profit can be earned from a trade usually comes down to timing, that is especially relevant in the world of day trading, when short term gains are viewed as more important. Since the majority of trades are for “fast money,” patience becomes important when the trade becomes an true investment. A trader should avoid over trading, because this will often lead to an investor forgetting her own predefined rules.

The good news is that timing a stock, like timing the markets, is a skill that comes with experience. Paying attention to trading volume and price movements will, over time, teach one to read the signals, spot the trend, and time the trade. With patience and timing, the cost of tuition for a new trader can grow to a substantial sum.

Last but not least, the successful stock trader has to have enough capital to be on his own, a self-employed person relying on his wits. To be independent requires money; money available after paying the bills and meeting his and his family’s livelihood needs. If he has that kind of money, he is confident and self-assured and not overly anxious about his capacity to take trading losses. In such a scenario, a stock trader, to be successful, must begin his trading career with a start-up capital of tens of thousands, if not hundreds of thousands, of dollars.

It takes time and financial resources to become a successful stock trader. There is a difference between a stock trader and an investor, the latter is only an amateur, while the other has a full time job of trading, and most compete with thousands of other “Market Wizards”. Trading is like gambling, and decisions become irrational once a loss is realized, and irrational trading often creates more losses, this is where trading discipline is important. Being a trader requires capital, and important payments, like loans, should never be funded by stocks that are to be sold in the future.

- Mark Crisp