Pro Stock Trading Tip #8 - Learning Not To Try To Hard to Make Money

Learn Not to Press Too Hard to Make Money

We've discussed in previous stock trading tips that focusing too much on the profit and loss of every trade can throw you off. While it is important to know how much you are making and losing per trade, it is counterproductive to track it on a minute to minute or even day to day (if you are a longer term trader). It is much more important to focus on executing your trading plan and focusing on the charts. There is a lot of noise during the day that can throw you off. This noise is designed to make you sell your position too soon or enter a position much too quickly.

One of the ways to avoid this is to limit yourself to making trades in the beginning of the day and then at the end of the trading sessions.

Follow the market and try not to lead it

Forcing trades to make money is by far one of the worst things a trader can do. This comes from times when you feel like you need money. Remember the market doesn't tell you when you are paid. It's not a weekly paycheck and some weeks it may even take your money away. When we press we often times trade more than our position size. We enter the mindset of trying to make things happen. Rather, we should be selectively entering trades that have odds in our favor and let the market come to you. Pounce when the opportunity comes your way. However, you can't be timid either. Otherwise that opportunity will pass you by. What we need is controlled aggression.

We need to be aggressive when the opportunity presents itself, but disciplined enough to not chase what has already resulted in a missed opportunity.

Learn to follow your rules

Ultimately, we end up time and time again at the need to follow our rules. Before we can follow our rules, we need to set them and explicitly state them. This trading plan will help you start. Before you make a trade, make sure you review the trading plan. This takes discipline and a lot of work, but if you make a concerned effort to do so, you'll see it pay off on the back end. Techniques that professional traders use include creating routines. It is one of the best ways to internalize these rules and eventually you won't need to look at your trading plan. You'll want to get to the point where it's like getting up in the morning and brushing your teeth. How do you create routines? Through repetition, repetition, repetition, and more repetition.

Labels: ,