What are those Stock Trading Secrets one need to learn to make money consistently in the Stock Market?
This is the question every novice to medium experienced traders seeks answer for and they continuously put in their time & efforts to unravel these secrets.
But are these secrets very hard to unravel?
Let’s find out…
Following are the Top 10 Stock Trading Secrets mastered by Stock Market Wizards…..
1. First in Stock Trading Secrets, the stock market can never be predicted.
This is the most important secret a newbie Stock trader should know. A trader can only play the probabilities through various trading methods.
The Stock market’s direction cannot be forecasted or predicted. One should understand that Market is always right.
It can be very expensive to try to prove the Market is wrong.
2. There is nothing like Holy Grail Trading Setup or a perfect trading strategy.
Most of the beginners waste a lot of time to find out & learn that ultimate trading strategy which could make them winner in every trade.
But is this possible for a strategy to achieve 100% winning rate?
No.
There is no stock trading secret set up or strategies that can give make you a winner in every trade.
If a strategy makes you a winner 6-7 times out of 10 trades, believe me it is a good strategy.
That’s what a Market Wizard knows & acts accordingly.
He knows that he can’t win every time and try to make the most of these winning trades. In the 3-4 trades his strategy fails, he already has steps to minimize the losses & moves on with the next trade.
3. Isolate yourself from the opinions of others.
This is a Stock trading Secret one need to give a lot of emphasis on.
How many times have you traded as per Brokers’ or friends’ recommendation?
Or how many times have you read or watched news; listened to expert’s advice & put all your hard earned money on a stock?
You thought prices will go up after you bought it.
But to your utter dismay, the Market acts the opposite almost every time….Your stock tumbles down the moment you entered the trade.
This does not seem new, Right?
Almost all of us has experienced this happened with us before.
The answer lies in the fact that we as humans are influenced a lot by other people’s thoughts & emotions.
It is sort of herd mentality that we like to follow other people’s actions.
To be a successful trader, one needs to focus on emotional discipline in all his trades & strive for detachment from all undesired emotions during trading.
And for that, it is very important to cultivate independent thinking & not blindly follow other’s advice or actions.
4. Cut losses fast.
This is one of the most important Stock Trading Secrets to survive in Stock Market.
Accept losses graciously and understand that you don’t need to be right all time. There is always another trade waiting for you.
Never add to a loser. Add to a winner only and let the profits run.
Great traders win only 50% of their trades but they still take home good money.
How?
By keeping their 50% losses very small and winning big from the rest 50% trades.
5. Stick to your Pre-determined Stop Loss
To cut losses fast, a trader needs to decide on a predetermined stop loss before he enters a trade.
And it is important that he never change the stop loss unless price action changes.
Planning where to get out before putting on the trade is a means of enforcing emotional discipline.
6. Standing aside is a position.
It is inevitable that Market will present difficult situations where you know it is not possible for you to make profits at all.
The wild swings of the market will hit your stop losses & take you out of the market frequently. Or your strategy cannot work in the current market trend.
In such scenarios, it is imperative that you stay out of the market. You wait….just keep waiting…. wait like a tiger waiting to pounce on his prey….
There will never a shortage of opportunities in the market. When the right time comes, that is when you strike.
7. Do not get over-confident or arrogant after a series of trade wins.
It is human nature that we get over-confident after accomplishing any task or winning a game many times in a row.
It’s sort of what happens with gambling. But you can’t gamble with Stock Market.
By being over-confident, you tend to forget your trading plan & in a matter of time, get completely over powered by your emotions.
That’s when you start making rash & unplanned decisions in your trading which would eventually lead to your downfall.
8. Let profits run.
It is popularly said that “While amateurs go broke by taking large losses, professionals go broke by taking small profits”
Maximizing the winners is what Master Traders do best.
They know that it is not possible to win more than 50% always and makes the best of their wins by letting their profits run.
9. Never chase stocks.
Traders rue when they missed a trading entry that eventually goes into the direction he thought it would.
The reality of having missed out a rally hurts them a lot and starts crying over spilled milk. They experienced what is popularly called FOMO (Fear of Missing Out) in trading world.
What happens next!!
He could not bear seeing left out and jumps into the trade at wrong entry price to chase it. This is a clear invitation for trade failure.
Traders should avoid this. They should know there is always another opportunity lurking, another stock to trade.
Trading is a serious business and should be treated like any other business.
10. Lastly in Stock Trading Secrets, A trader needs to lead a normal life.
All the successful traders that lasted in the business have a balanced life. They have fun outside of trading.
If you enjoy a normal happy life, you can stay calm and focused. This is very important for a disciplined trading, devoid of any emotions.
Did you just noticed these Top 10 Secrets are not in the complexity of trading?
The secret lies in making your trading simple (KISS – Keep it Simple Stupid), remaining disciplined, calm and following trading management rules strictly every day of your trading journey.
