Trading Tips for Short and Long Trades

By: chris on 2013-06-29

Stock Trading Tips

Determine prior to placing any trade a plan of attack. Be consistent and consistent with following your trader rules for entry, exit and stop placement. You should know how you’re going to approach a trade prior to its fruition. The main reason for a trade plan keeping those who may be new to the game is simply to keep your emotions in control.

Keep in mind what the market itself is telling you with respect to direction. You want to make sure that as a trader you are aware of the effects the market may and will have on your positions if it has an agenda. The markets’ overall trend can in fact alter your trade in two ways. The first, is that it may hold back otherwise profitable strategy opportunities. The second is of course a positive extension or initiation simply by having the overall market on your desired trade direction.

Learning How To Control Trading Risk

Risk only what your account can handle and understand capital preservation. Make it a point to understand that your position size should be a factor of your positions or portfolio. There’s really no need to overload a single position. You truly are playing with fire and it shouldn’t take an abnormal tough recover loss to prove to you otherwise. Knowing what you can handle also places an emphasis on being able to pull the trigger or allow a stop to be taken out when you’re wrong. A successful trader has the innate ability to admit when he/she is wrong.

You’ll soon find out the markets are driven by greed and fear with your success a factor of your ability to control this. You should already have a plan to follow in order to combat these common road blocks, but if price is butting up to your exit by a few cents I see no problem taking profits on trades.

Ultimate Goal When Trading Long and Short

Your ultimate goal within any market you trade is to have developed your own niche within the market. Try to stay away from following blindly into positions that others may suggest. Be comfortable with the decision because your own research says so and not someone else’s.

Write down important aspects of your daily trade process. Some call it a journal while others a diary. Whatever you want to name it is irrelevant. What is relevant is your commitment to taking notes about your trading day. In these notes include your ability to balance greed and fear as well as your actual set up and follow through.

Develop a keen sense or ability to recognize slow or sideways market. Once you’ve made the decision on the characteristics of the market feel comfortable sitting on your hands.

Avoid Common Trading Pit Falls

Boredom can take over at any time when you’re sitting at your trading desk. Inevitably you might end up placing a trade just for the excitement. Trading should not be exciting and should remain boring day in and day out. Only take a trade that has a rational reasoning for entry.

All of the above play a major role in your success, but one common theme exists throughout. This important characteristic is your ability to control emotions. All of the above will be triggered by a traders lack of ability to either “sit on hands”, place a trade or even exit a trade.

About Stocks and Stocks

Stocks and Stocks has been helping traders trade for more than 4 years now. What we bring to the table is an unbiased point of view on individual stocks and the stock market.

It is our hope that you are truly able to gain some value from this approach to trading education. To best take advantage of this site it is important to truly understand concepts and not fall into the trap as most traders. This trap being moving on from strategy to strategy before you master it. Don't become a aware of many things and a master of none!

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