How to be consistently successful in your stock trading
Beginner Stock Market Investing, Stock Market Investing Advice, Stock Market Investing Strategies
You would have heard among the many characteristics of a consistently successful trader are the ability to devise a consistent stock trading method and strategy and the discipline to stay with the chosen method on a long-term basis. In addition, you need to have adequate trading capital and the skills to manage this capital as well as the ability to divorce emotion completely from your trading judgment and decisions. While all this is no doubt important, probably the most critical characteristic is patience and the ability to place only those trades that have the highest probability of success.
Let us assume that you are using the Elliott Wave Principle as the basis of your technical analysis and see how counting and identifying waves can teach the value of patience. You know that the Elliott Wave Principle holds that corrections and counter trends show themselves as three wave patterns. You also know that these waves tend to move within parallel lines and the most common ways in which retracement operates. All of these conditions need to be present to provide you with a high probability trade and yet many traders like you take positions when only one or two of these conditions are present. This normally happens because you are impatient to trade actively and loath to wait until all the conditions are present.
There are several causes for this impatience. It may be that you lack a proper trading methodology and/or the discipline to stick with it. It is more likely that because you do not wish to miss out on the next big deal or because you are trying to recoup losses, you rush into low probability trades. It is also eminently plausible that you may act because you are bored. High probability trades do not happen that frequently and, depending on your trading style, you are likely to see no more than two or three of them in your trading horizon. For instance, if you are a day trader, this is the likely frequency in the course of any trading day. It is quite likely that while you are waiting for the conditions for the best trading possibility to happen, boredom sets in because you are doing absolutely nothing and possibly getting a little bit frustrated.
Now that we have identified the two main reasons for the impatience, the fear of missing out on a big thing and boredom, we can proceed to examine how to deal with these reasons. The first thing to do is to identify the minimum acceptable conditions which would constitute an acceptable setup to enter a trade. These conditions should be regarded as inviolable and cast in stone. The second thing is to promise yourself that under no circumstances will you violate your trading discipline. Once you reach a basic understanding that the markets and the opportunities will always be around, you would begin to understand that trading is not a race and that you need not be the first one off the blocks in order to succeed. A flurry of trading in less than ideal conditions is only a recipe for you to lose money.
Tags: investing strategies, Stock Market, Stock Market Investing, stock market strategies, stock trading