Done correctly, trading stocks can increase your wealth exponentially. Done haphazardly however, and you could potentially lose everything. If you wish to be successful in the stock market, you need to devote nearly as much energy as you would a full-time job. Sure, you might hear occasional stories about the wunderkind who make a killing on the market, but those supposed success stories are few and far between. Most people who created their financial freedom through stocks did it with a long-term view.
Educate and Commiserate
Successful traders will be the first to tell you that you need to learn about the markets before diving into the cutthroat industry. You need to learn what options you have (read this article at yourfinanceinfo.com to learn more) and how they work. Every professional baseball player had to learn to swing a bat at some point and so you need to learn the ins and outs of stock trading. Read everything you can, watch the markets on a daily basis using charting and other stock trading tools. And like a rookie getting the call-up to the big leagues, pay attention to what the veteran traders are doing. The ones making real money are making moves before everyone else (more on that in a moment).
KISS (Keep it Simple Stocktrader)
To be sure, everyone has heard the theory “buy low and sell high,” yet in practice it can be difficult to remember that money making mantra. How do the rainmakers always seem to know when to move in and when to cut loose? The answer is simple; they know the markets like the back of their hand. They use real-time knowledge and stay updated at all time. Bottom line, they never stop learning. Big time stock traders understand you can never rest on your laurels.
Now that sounds simple, and to be quite honest it is; however do not let its simplicity fool you. Successful stock trading requires hard work. Going back to the baseball metaphor; big leaguers make it look easy but that was after thousands of hours perfecting their skills. The same holds true for people looking to succeed in the stock market. You need to become a student of the market. You can never learn everything, yet that should not stop you from trying.
Make the Move Sooner than you Need
Earlier, this article stated, “The ones making real money are making moves before everyone else.” When you see a big swing in the market, you have already missed on your opportunity to make a large splash, yet by then, there are veteran stock traders who made huge amounts of money because they made a move right before the wave. A knowledgeable trader will sell their stock just before the stock price falls. How do they do that? Stock market trading is not just about buying a stock and hoping it rises enough to justify selling it. You need to pay attention to the trends.
Now, you can only learn the trends by using real-time information. There are many tools online that you use to keep yourself abreast of everything occurring in the markets. Some people use free charting tools that give accurate but delayed information, while more serious traders will use live time charts that are updated to the very second, such as the real time stock charts at esignal.com.
The only way to be successful at stock trading is to keep yourself up-to-date at all times. Daily updates are good, but hourly is better if you want to be able to identify when an upswing or downswing is to take place. Using knowledge from a couple books on the market can help, but to be truly successful you need to acquire all the knowledge you can. Never stop learning.