When trading in the stock market, position sizing is where all the tools of money management come together. It is perhaps the most important part of your stock market money management rules. Position sizing is simply deciding how much you are going to enter any one stock market trade. You can calculate your position size…
The Seven Mistakes All Novice Traders Make and How to Correct Them
We learnt the following the hard way! If any of these things applies to you, do not worry – there is a simple solution! Lack of Knowledge and No Plan It amazes us that some people expect to trade the stock market successfully with no effort. Yet if they would like to take up golf,…
Traders, Defend Against the Dreaded Death Spiral.
It’s often been said that there’s only two ways to get hurt really bad on a stock exchange, becoming caught in a”death spiral” by not using DTM: Decisive Trade Management in the means of stop loses and using a stock stopped on you. Halts you have zero control over. Death spirals are of your own…
Don’t Buy Stocks based on P/E Ratio alone
I use the P/E ratio as a secondary indicator for buying and selling stocks but I do not use the ratio in the same a manner as many value investors teach. I’ll explain the difference in my methodology for using the P/E ratio to your advantage. Many value investors will pass on a growth stock…
A Common Misconception about Stock Prices
I cringe every time I hear a novice investor inform me that they only buy low priced stocks because they offer greater potential profits. A frequent stage I hear is”I love to buy $1 and $2 shares as they can double easily and I’ll make a 100% gain”. My response is to always let these…
How To Make, And Keep, Money Trading Stocks
If you’re serious about making and keeping money by trading stocks, then there are 3 things you will need to do, and do well. Money management Orders Trading system Money management Money management comes first. Without a rock-solid way of managing your trading funds, you trading results will be only be fair at best. Money…
12 Basic Stock Investing Rules Every Successful Investor Should Follow
There are lots of important things you want to know to trade and invest successfully in the stock exchange or some other market. – Buy low-sell high. As straightforward as this concept seems to be, the huge majority of investors do the exact opposite. Your ability to consistently buy low and sell high, will determine…
Making a Stock Watch List
I am taking the opportunity to help others learn the fundamentals in assessing stocks for investment using the technical and fundamental analysis. Both tools are equally important in making serious decisions with your hard earned CASH! If you would like to invest in stocks, then treat it like a business, NOT A HOBBY. (ex: a…
Play another Day
Money management starts with protecting your capital, realizing profits and cutting losses. As I have stated previously, without cash, you can not invest. Cash is king and learning how to manage your cash is the most important aspect to investing in stocks. The game is won by lowering your risk by properly turning the numbers…
Ignore Stock Market ‘Talking Heads’
You should ignore analysts on TV, the radio, the paper and other TALKING HEADS when it comes to investing! What stocks do they speak about? – The same old group, every day of every year – Why? Since they do not know any better, they’re sheep such as the general public, repeating what every economic…