This post 3 Things You Can Do to Improve Your Trading Right Now appeared first on Daily Reckoning.
You want to kick up your trading a notch?
Fine. But before you put a single dollar on another stock, there’s something important you need to understand.
The stock market doesn’t care about you. It doesn’t care what kind of fancy degree you have. It doesn’t care how many years of trading experience you have or how many complex techniques you use to pick your investments.
If you want to succeed in the market, you need to adopt that same spirit of indifference. You need to forget about your emotions and hunches.
In fact, if you approach the market with a trader’s mindset, you will instantly cut your losing trades in half and grow your account faster than you ever imagined.
But first, you must change the way you think about the markets. And once you know how, you’ll be able to drastically improve your returns while protecting your portfolio from crippling losses.
All you need to do is learn these three unbreakable trading rules.
Follow these three simple rules and you’ll quickly set yourself up for trading success. It doesn’t matter if you’re trading every week or just picking up a couple of plays a month to supplement your long-term portfolio. Stick to these rules and the market will reward you handsomely.
Here’s what you need to know:
1. Price Is King
Price action will tell you everything you need to know about the markets. The financial news, rumors, gurus — all the rest of this crap is just noise.
There’s no place for emotions, hunches or astrology here. OK?
The minute you allow your analysis to drift away from price, Mr. Market’s going to suck you into bad decisions that will cost you money. You have to toss your beliefs aside and obey the market’s signals — even when they run contrary to common sense.
Let’s say you believe the markets will correct soon because valuations are just too high. If you cling to that belief when the market begins to move against you, you’re going to run into trouble. Instead of obeying price action, you insist your analysis is correct.
But 9 times out of 10, the need to be “right” will end up costing you big bucks. Price is your judge, jury and — if you disobey the rules — executioner. If the market tells you you’re wrong, sell your investment or trade and move on to your next opportunity. There are always others. Always remember, it’s infinitely better to admit you were wrong and lose a little than to insist the market is wrong and lose a lot.
As I said, the market doesn’t care what you think. All that matters is how much you pay for a stock and how much you sell it for. Period.
2. Don’t “Bottom Fish”
Sometimes, you’ll see a down and out stock rocket higher due to a positive earnings surprise or some other news event. That’s when you discover how much self-discipline you …read more
Source:: Daily Reckoning feed
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