How To Finally Start Profiting From Trading The Stock Market is one of the finest articles about Stock Trading. There are lots of posts on the web that discuss Stock Trading, How To Finally Start Profiting From Trading The Stock Market certainly one of which we recommend for you. Hopefully the articles that individuals share below can be of use, improve information and be considered a answer for you.
After 15 years of actively trading the stock market, here are 6 things I have learned that will help you to become a far more consistent, more profitable trader.
1. Only trade fast-moving trends.
Our ability to profit from the stock market depends more on this decision than any other: ONLY trade long-term, fast-moving trends.
The results of your trading depend less on which stocks you trade, and more on how quickly those stocks are moving from one price level to another.
Fast-moving trends allow us to accumulate profits quickly. It’s as simple as that.
2. Only buy stocks that show promise.
The second most important decision is this: You should ONLY buy fundamentally sound stocks that are also trending higher, because they present you with the safest buying opportunities.
Buying a stock just because it is going up can work out well for you. For a while.
However by limiting your purchases to stocks that are both fundamentally sound AND rising in value, your potential for building a profitable, long-term trading business is multiplied many fold.
3. Use a proven entry trigger.
Regardless of the fundamental outlook for a stock, or whether it is trending higher, always wait for a proven entry signal before committing your funds.
A candlestick charting signal such as a Bullish Engulfing pattern is a classic entry trigger, and is something you can often rely on to get you into up-trends.
4. Confirm the up-trend.
By drawing a 20-period simple moving average on your charts, you have a simple method for determining the trend.
Never buy or hold a stock that is trading below a 20 period simple MA. For clarity, I colour mine GREEN in an up-trend and RED in a down-trend.
5. Take profits.
Trading profitably means we must take profits. However taking them too early means we can leave a significant amount of money on the table unnecessarily. To lock in profits, use what I call the “Thin Blue Line” indicator.
The Thin Blue Line Indicator is created by drawing a blue, 8-period exponential moving average on your charts.
SELL on a close below the 8-period exponential MA, even if your 20 period MA is still green and rising.
6. Buy high, sell higher.
After selling on a close below the 8-period moving average, BUY again on a close above your 8-period MA, AS LONG AS the stock is still above a RISING 20 period MA, indicating the trend is continuing higher.
This means you can enter and exit a long-term trend several times, but you will be out of the market when that trend inevitably comes to an end.
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