How do I become a good stock trader?

Trade! Please don't take this the wrong way, but this is like asking how you become a good pianist. You have to practice, practice, practice, and you have to have a natural talent for music to begin with.

Stock trading is exactly the same way. One of my businesses is developing software for day traders to automate their algorithms, and I've seen a range of personalities and intelligence levels. There's no common thread here - you're either good at intuitively sensing what the market is doing, or you're not.

A few pieces of advice: 1. Systems don't work - don't ever buy a book with a system in it. If you think this will work, you do NOT have what it takes to become a good trader.

Think it over - there's no more chance you could buy a million$-making system in a $39.95 book than you could build a perpetual motion machine. If it's in a book, that's the system that never worked, couldn't possibly work, or worked but doesn't work any longer. 2.

Bankroll is critical. You can take big swings, and you CANNOT get discouraged by them. Don't try to do this with $1000.

You'll never get anywhere trading 7 shares of IBM. Day/swing/technical traders typically make money on pennies - I made 23c on several trades on the Qs today. The Qs are in the 40s.

If you trade with $1000 you can only buy 25 shares. That would have been less than $6. I won't tell you how many shares I did trade (or anything else) but obviously you need a lot of cash if you actually want to make any real money.

Ideally you'd want a bankroll of $50k-$100k to start, and be prepared to lose at least half of it while you learn. 3. Partner with a good shop.

There are places that will still sponsor you for your Series 7, which will teach you a LOT - and then mentor you as you start trading. Much more important, they'll provide buying power - margin that lets you buy more shares on a limited bankroll - and trading software, usually for free, which is a huge value. Add up the cost of eSignal Pro, Reuters, and some news feeds and you'll be spending a few grand each month just on software and data if you want to trade professionally - most shops give you this for free.4.

Try a demo account. Most of the above shops will let you trade 'fake' money - you get (usually within a penny of) the price you would have paid in real life, but you're not trading real money. You can look at charts, test out theories, and generally give it a go, without any risk on your part other than time.5.

Good luck! You'll either develop a feel for this, or you won't. Keep an eye open for the signs - most people know within a few weeks if it's going to work out, but most also don't want to admit it (if the answer isn't what they'd hoped).

If you find that trading your own money isn't your thing, but think you might still be decent at trading given time, once you have been sponsored for your Series 7, go apply for a job with a big trading firm or bank, a market maker, or a hedge fund. Try to get on their trade desk. If you can do that you'll get a huge amount of experience and they'll pay you while you learn.It's a very high-pressure environment, but it's great experience, too..

Buy larger local companies on "Bad News", Sell on "Good News" based on rules set before you buy My advice is to "BUY LOCAL". Pick larger-cap (big companies) local stocks where you are more familiar with them,whether you are a customer, a supplier, ... a trend follower. You want to purchase on "BAD NEWS"when you believe that the company will get over a recent short-term event,You want to sell on "GOOD NEWS"when you believe that the upward trend you predicted is about to end.It is very difficult to decide to sell,so make rules for yourself in advance and stick to them.

You can update your rules after you do more analysis to figure out if they need to change, andif so, how they need to change. So always create your rules for when you will sell the stock BEFORE you purchase it;both for if the price goes up to "lock in" your profits,as well as if the price goes down to "cut your losses". --------Swing trading sits in the middle of the continuum between day trading and trend following.

Swing traders hold a particular stock for a period of time, generally between a few days and two or three weeks, and trade the stock on the basis of its intra-week or intra-month oscillations between optimism and pessimism. The first key to successful swing trading is picking the right stocks. The best candidates are large-cap stocks that are among the most actively traded stocks on the major exchanges: for example, Intel, Microsoft, and Cisco Systems.

In active markets, these stocks will swing between broadly-defined high and low extremes, and the swing trader will ride the wave in one direction for a couple of days or weeks, only to switch to the opposite side of the trade when the stock reverses direction. It should be noted that in either of the two market extremes, the bear-market environment or bull market, swing trading proves to be a rather different challenge than in a market that is between these two extremes.In these extremes, even the most active stocks will not exhibit the same up-and-down oscillations that they would when indices are relatively stable for a few weeks or months. In a bear market or a bull market, momentum will generally carry stocks for a long period of time in one direction only, thereby ensuring that the best strategy will be to trade on the basis of the longer-term directional trend.

The swing trader, therefore, is best positioned when markets are going nowhere -- when indices rise for a couple of days and then decline for the next few days, only to repeat the same general pattern again and again. A couple of months might pass with major stocks and indices roughly the same as their original levels, but the swing trader has had many opportunities to catch the short terms movements up and down (sometimes within a channel). Of course, the problem with both swing trading and long-term trend following is that success is based on correctly identifying what type of market is currently being experienced.

Looking back over the past few years, trend following would have been the ideal strategy for the raging bull market of the last half of the 1990s, while swing trading probably would have been best for 2000 and 2001. With the 2002 bear market, the best strategy would have been to follow the trend and short everything in sight. As economists and traders would agree, the most accurate insight into trends is viewed in retrospect.

Much research on historical data has proven that in a market conducive to swing trading liquid stocks tend to trade above and below a baseline value, which is portrayed on a chart with an exponential moving average (EMA). In his book Come Into My Trading Room: A Complete Guide to Trading, Alexander Elder uses his understanding of a stock's behavior above and below the baseline to describe the swing trader's strategy of “buying normalcy and selling mania” or “shorting normalcy and covering depression. ” Once the swing trader has used the EMA to identify the typical baseline on the stock chart, he or she goes long at the baseline when the stock is heading up and short at the baseline when the stock is on its way down.

So swing traders are not looking to hit the home-run with a single trade -- they are not concerned about perfect timing to buy a stock exactly at its bottom and sell exactly at its top (or vice versa). In a perfect trading environment, they wait for the stock to hit its baseline and confirm its direction before they make their moves. The story gets more complicated when a stronger up-trend or down-trend is at play: the trader may paradoxically go long when the stock jumps below its EMA and wait for the stock to go back up in an uptrend, or he or she may short a stock that has stabbed above the EMA and wait for it to drop if the longer trend is down.

When it comes time to take profits, the swing trader will want to exit the trade as close as possible to the upper or lower channel line without being overly precise, which may cause the risk of missing the best opportunity.In a strong market when a stock is exhibiting a strong directional trend, traders can wait for the channel line to be reached before taking their profit, but in a weaker market they may take their profits before the line is hit (in the event that the direction changes and the line does not get hit on that particular swing). Swing trading is actually one of the best trading styles for the beginning trader to get his or her feet wet, but it still offers significant profit potential for intermediate and advanced traders. Swing traders receive sufficient feedback on their trades after a couple of days to keep them motivated, but their long and short positions of several days are of ideal duration not to lead to distraction.By contrast, trend following offers greater profit potential if a trader is able to catch a major market trend of weeks or months, but few are the traders with sufficient discipline to hold a position for that period of time without getting distracted.

On the other hand, trading dozens of stocks per day (day trading) may just prove too great a white-knuckle ride for some, making swing trading the perfect medium between the extremes. http://en.wikipedia.org/wiki/Swing_trading Sources: My personal opinion and professional experience..

With all the trading information, systems, trading advice and assistance available today, the fact that most people who attempt to profit from trading Stocks lose money seems quite bizarre. Can you imagine the millions of dollars that must have been spent by countless traders on courses and Stock analysis software, that was wasted because the buyers didn't understand the key principle of trading success I am about to share with you now. We aren't going to need any charts for this lesson...just your ability to comprehend the value of what I am about to share with you and your willingness to take action - right now I want to share with you the ABC of trading success.

Sources: tradestars.com/click-volume.asp .

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Where is the best place to learn about the FOREX market to become a trader.

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Nashville's first-ever Trader Joe's opens today!

Is there an advantage to doing your financial planning at a bank like harris or is it better to go with edward jones or.

Write 5 sentences about the role of education in successful financial planning, in which you correctly use a different.

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