| Thursday, Feb 25, 2010
| Permalink |  |
| Raising Stops |
| By Invested Central |
| Thursday, Feb 25, 2010 10:39 |
If you are a disciplined trader, then you will always have a stop loss in mind when you enter a position. You might actually enter a physical stop or simply print the stop loss in your memory bank and watch in case it hits that area.
Whatever the case, if you buy a stock and it moves in the direction you want it to, then you should consider raising your stop along the way.
For example, say you buy a stock at $50 a share with a stop loss of $48. Right after you buy the stock, it moves up to $52. You should consider raising your stop up $1 to guarantee locking in at least $1 in profit. If the stock moves up even higher, say another $2, then raise your stop another $2, then you are guaranteed a $3 profit.
You might be thinking that by raising your stop you have a greater chance of being stopped but so what? What if you don't raise the stop and it pulls back and actually gets stopped out at the original stop loss area? That won't be any fun!
Trading is about one thing only; making money. When you find yourself on the positive side of the ledger, don't be afraid to protect those precious profits that are so hard to find. |
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| Saturday, Feb 20, 2010
| Permalink | |
| Luck versus Skill |
| By Invested Central |
| Saturday, Feb 20, 2010 08:55 |
When you are a trader, you need to make intelligent choices all the time. This means you need to do your homework and to make your decisions based on the best information available at the time of a trade. Some people think good trades are based upon a combination of skill and luck. This may be true, but the fact is if you rely upon luck too often, it won't do anything to fatten your trading profits. Instead, you need to be able to make spur of the moment decisions grounded in facts rather than rely on luck to see you through the trading day. Not that a little luck here and there isn't helpful, but relying on luck in lieu of smart choices doesn't make sense. Learn to make intelligent choices that increase your odds of succeeding. Learn as much as you can about technical analysis and what the successful traders know that you should as well; better good than lucky. |
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| Monday, Feb 15, 2010
| Permalink | |
| Planting the Seeds |
| By Invested Central |
| Monday, Feb 15, 2010 06:30 |
When you are a trader, there are definitely times where you need to get yourself set for periods that might be slow or are setting up for a nice upswing. If you are able to do this, then when the time comes along to be more aggressive, it can really pay off big time. This might mean that there are a number of weeks where you play very lightly if at all, which calls for big time discipline, especially if you like to trade daily. You have to make the choice between active trading where it gets frustrating and possibly costly or going very lightly knowing there will be a right time to be in the market full speed ahead. A good place to start is slowing down a bit, pacing yourself, preserving your capital along the way. This way, if things turn against you, it won't put you out of the market forever. For some reason traders think being in the market is a 24-7 thing when the reality is you can determine exactly when you are in and out. Planting the seeds for something bigger down the road takes practice and patience, but if you can at least begin the process, it will pay nice dividends down the road. |
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