10 Tips for Successful Stock Market Trading

1)Do learn what really works on Wall Street. What many books and journalists love to blab on about doesn't actually make money in stocks. Watch what the successful traders do. This is the cornerstone of your success. Follow the wrong method and everything else is waste of time.

2)Learn to be disciplined. If there is one character that separates the winners from loses in this game it is discipline. Top traders learn to follow their rules. They stick with winning stocks and are not afraid to keep out of the markets when conditions are not right. They do not over trade or trade for the sake of trading.

3)Cut those losers. I have never met a trader and never will, who does not have losing trades. It's all part of the business. But winners will cut those losers fast and move on. Losers will hang on and hope it turns around. If you cannot cut those losers you will not be in Wall Street long. That I can promise you.

4)Let those winners run. Occasionally in your stock trading career you might be lucky enough to actually snag a "10 bagger" (a stock that goes up ten fold) BUT in order to do this you must give it room to grow and be disciplined enough to ride those corrections out along the way.

5)Stick to top quality stocks: Contrary to popular belief stocks do not go up out of the blue. Hey go up because they are massive profit pulling businesses that have years of high-powered growth (or expected growth) ahead of them. Institutions and other big traders follow these stocks and invest money into them. This is what makes them move. Penny stocks, poor stocks, beaten down stocks are simply a gamblers paradise.

6)Only invest/trade in favourable market conditions. During the great bear market of 2000 -2002 there was hardly a stock worth trading for me. I was virtually out of the market for 2 years as other trades lost money. When the market finally turned I was able to make great money again. But I needed to protect my capital first.

7)Truest your-self: Learn to find and trade winning stocks on your terms. Do not go looking for other people's advice. It's human nature to want to follow the herd. But the "herd mentality is often wrong" If you have to ask you shouldn't be trading.

8)Risk a little and live to fight another day: For individual traders you should not be risking more than 3% of your trading capital on any one trade. Any more and the very least you are going to experience are enormous equity swings. At the worse you will wipe out. I am telling you now. Risk more than 3% of your capital and the stress will start to eat you up. It isn't a race.

9)Get really good at one possibly two methods of trading: Stop jumping from one method to another. There are many different ways to make money in the stock market but you need an edge and that edge comes from experience. Every method goes through good/flat times. Resist the temptation to jump ship when your method goes through a flat period.

10)Take it easy. The stock market is not a business that can be forced to give up money if we work hard in it. It's opposite to most other types of business. It's pretty weird actually. When conditions are right you will make so much easy money you will laugh. The key is not to give that back when conditions are not right.

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