Having been trading stocks and options in the capital markets expertly throughout the years,I have seen lots of ups and downs. I have seen paupers become millionaires overnight … And I have seen millionaires become paupers overnight … One story informed to me by my coach is still etched in my mind: ” When,there were 2 Wall Street stock market multi-millionaires. Both were exceptionally successful and chose to share their insights with others by offering their stock market projections in newsletters. Each charged US$ 10,000 for their viewpoints. One trader was so curious to know their views that he spent all of his $20,000 cost savings to purchase both their viewpoints. His pals were naturally excited about what the two masters had to say about the stock market’s instructions. When they asked their friend,he was fuming mad. Confused,they asked their friend about his anger. He said,’One said BULLISH and the other said BEARISH!'”.

The point of this illustration is that it was the trader who was wrong. -,and In today’s stock and alternative market,individuals can have different viewpoints of future market instructions and still profit. The differences lay in the stock selecting or options strategy and in the mental attitude and discipline one utilizes in carrying out that strategy. I share here the basic stock and alternative trading concepts I follow. By holding these concepts strongly in your mind,they will guide you regularly to profitability. These concepts will help you reduce your danger and allow you to examine both what you are doing right and what you may be doing wrong. You may have read concepts similar to these prior to. I and others utilize them because they work. And if you remember and review these concepts,your mind can utilize them to guide you in your stock and options trading.

PRINCIPLE 1. SIMPLENESS IS PROFICIENCY. Wendy Kirkland I learned this from},When you feel that the stock and options trading approach that you are following is too intricate even for simple understanding,it is probably not the very best. In all aspects of successful stock and options trading,the simplest approaches frequently emerge triumphant. In the heat of a trade,it is easy for our brains to become mentally strained. If we have a complex strategy,we can not stay up to date with the action. Easier is much better.

PRINCIPLE 2. NOBODY IS OBJECTIVE ENOUGH. If you feel that you have absolute control over your feelings and can be unbiased in the heat of a stock or options trade,you are either a harmful species or you are an inexperienced trader. No trader can be definitely unbiased,particularly when market action is uncommon or hugely erratic. Just like the ideal storm can still shake the nerves of the most experienced sailors,the ideal stock market storm can still unnerve and sink a trader really rapidly. Therefore,one need to venture to automate as lots of important aspects of your strategy as possible,particularly your profit-taking and stop-loss points.

PRINCIPLE 3. HOLD ON TO YOUR GAINS AND CUT YOUR LOSSES. This is the most crucial principle. A lot of stock and options traders do the opposite … They hold on to their losses way too long and watch their equity sink and sink and sink,or they leave their gains prematurely just to see the cost go up and up and up. Gradually,their gains never ever cover their losses. This principle takes some time to master appropriately. Contemplate this principle and review your previous stock and options trades. If you have been undisciplined,you will see its reality.

PRINCIPLE 4. BE AFRAID TO LOSE CASH. Are you like most newbies who can’t wait to leap right into the stock and options market with your cash wishing to trade as soon as possible? On this point,I have found that most unprincipled traders are more scared of missing out on “the next big trade” than they hesitate of losing cash! The key here is STICK TO YOUR METHOD! Take stock and options trades when your strategy signals to do so and avoid taking trades when the conditions are not satisfied. Exit trades when your strategy states to do so and leave them alone when the exit conditions are not in place. The point here is to be scared to get rid of your cash because you traded needlessly and without following your stock and options strategy.

PRINCIPLE 5. YOUR NEXT TRADE COULD BE A LOSING TRADE. Do you definitely think that your next stock or options trade is going to be such a big winner that you break your own money management guidelines and put in everything you have? Do you remember what generally happens after that? It isn’t quite,is it? No matter how confident you may be when going into a trade,the stock and options market has a method of doing the unforeseen. Therefore,constantly stick to your portfolio management system. Do not intensify your anticipated wins because you may end up intensifying your really genuine losses.

PRINCIPLE 6. ASSESS YOUR PSYCHOLOGICAL CAPACITY PRIOR TO INCREASING CAPITAL OUTLAY. You know by now how different paper trading and genuine stock and options trading is,don’t you? In the very same method,after you get used to trading genuine cash regularly,you discover it exceptionally different when you increase your capital by 10 fold,don’t you? What,then,is the difference? The difference remains in the psychological concern that includes the possibility of losing more and more genuine cash. This happens when you cross from paper trading to genuine trading and likewise when you increase your capital after some successes. After a while,most traders recognize their optimal capability in both dollars and feeling. Are you comfortable trading approximately a few thousand or 10s of thousands or hundreds of thousands? Know your capability prior to committing the funds.

PRINCIPLE 7. YOU ARE A NEWBIE AT EVERY TRADE. Ever felt like a specialist after a few wins and after that lose a lot on the next stock or options trade? Overconfidence and the false sense of invincibility based on previous wins is a dish for catastrophe. All specialists appreciate their next trade and go through all the appropriate actions of their stock or options strategy prior to entry. Deal with every trade as the first trade you have ever made in your life. Never differ your stock or options strategy. Never.

PRINCIPLE 8. YOU ARE YOUR FORMULA TO SUCCESS OR FAILURE. Ever followed an effective stock or options strategy just to stop working severely? You are the one who figures out whether a method is successful or stops working. Your personality and your discipline make or break the strategy that you utilize not vice versa. Like Robert Kiyosaki states,”The financier is the possession or the liability,not the investment.”. Understanding yourself first will result in ultimate success.

PRINCIPLE 9. CONSISTENCY. Have you ever changed your mind about how to implement a method? When you make changes day after day,you end up capturing nothing but the wind. Stock market changes have more variables than can be mathematically formulated. By following a tested strategy,we are guaranteed that somebody successful has stacked the odds in our favour. When you review both winning and losing trades,identify whether the entry,management,and exit satisfied every criteria in the strategy and whether you have followed it specifically prior to changing anything.

In conclusion … I hope these simple standards that have led my ship of the harshest of seas and into the very best harvests of my life will guide you too. Best of luck.