Today, I want to provide you with some tips that can directly benefit your trading… the same techniques I used to go from a broke school teacher (who didn’t know how to trade)… to routinely pulling off profits like this:
There are common mistakes that are probably stopping you from making money in the stock market. Chances are you don’t even know you are committing them.
There are about half a dozen or so reasons why traders struggle to be profitable. Each one of them, as important as the next.
I’ve put together some steps you can take to fix them. If you follow through on them then you’ll sure to be ringing in bigger profits this holiday season.
You Need More Practice
Sometimes jumping in and trying to learn on the go only works for swimming.
And if you remember correctly it was a parent or older sibling that pushed you in.
Trading takes time, commitment, and a great deal of learning to start seeing profits.
A trading simulator is an excellent way to practice without putting your own personal cash on the line. This way you can practice trading on everything from stocks to cryptocurrency. An added benefit is that you can practice the new strategies as you learn them risk-free.
For example, you can learn my fish hook and rocket patterns that I use all the time to consistently rake in profits from small-cap momentum stocks.
You could choose any strategy really and paper trade. If you prove you can properly risk manage and have consistently made money over time, you could start out trading small and increase your trading size over time.
You Aren’t Managing Your Risks
Not having a risk management strategy is a huge danger. It can cause you to bleed money instead of making money. Addressing risk is a critical factor when trading…
Most traders start out not knowing what to trade… let alone how to manage risk.
Set Risk Limits
One way to protect yourself from loss is to diversify your portfolio by following the 5% rule. This way the worst-case scenario is you only suffer from a 5% loss if things go badly.
Another way to control risks is to place a stop-loss order on your trades.
This way when that holding drops to or past your limit a market order will be placed. It will then close at the current price of that holding. This gives you the reassurance that you won’t wake up from a nap having accidentally thrown money down a well.
For example, when I’m trading small-cap momentum stocks, I know exactly where I will stop out and take profits.
If I find a key level (it just so happens to be the 61.8% retracement level), I would use that as a stop-loss.
Your Emotions Are Getting To You
You should trade how you would run a business ── like a boss. Putting fear, FOMO, greed, and grief to the wayside. These emotions can have a huge influence on your trades.
It can lead to not follow through with the trading strategy you set up. Or not cutting your losses when you should. Or cashing out prior to a big payoff. All of these emotions are purely reactionary and unnecessary when trading.
Remember to check yourself to make sure you aren’t operating based on your feelings.
Having a solid strategy is a great way to maintain your focus and deter emotional trading.
You Aren’t Keeping A Trading Journal
A good way to see why you aren’t making money is to go full Sherlock Holmes on yourself.
That’s where visiting the scene of the crime comes into play.
How do you do that one might wonder? By keeping a trading journal.
Keeping track of what you’re trading. Why you are trading it, entry, exit, and time of the trade included. The outcome is necessary too ─ did you win or lose?
But it’s not just the trade itself that is important to keep track of but also how you feel. And track those feelings for before, during, and after the trade.
If you made an error or missed a trade keep a note of it and how it happened.
After a bit of time making an effort to record everything, you will have a log of your progress. It will include what worked for you and where you sucked.
After an investigation into your journal, you can pinpoint where you need work.
Put In The Work
Being a profitable trader means that you can’t take a vacation from learning. There is no way possible that you know everything you will ever need to know.
And if you think that you do it could be why you aren’t making money.
It’s like getting a gym membership and never going.
A gym membership does automatically equal summer-ready abs.
This where you start making moves to further your growth.
Find a skilled and successful trader to learn from… and practice that strategy before you go live.
Practice proper risk management and always know where your outs are. Using charts helps me define my risk and plan according.
Make sure the latest information about trading constantly available to you. You will be seeing, hearing, and reading about how to make money trading. Also, take note of what strategies they used to pull in those profits.