So many of us seem to lose money, or at best are just fortunate to break even in the stock market. Have we ever wondered why?
Quite often, beginning traders get excited when they get lucky and one or two of their stock picks turns into a profitable trade. The thought then naturally follows that this "stock trading thing is pretty easy!" With so many books, magazines and info available on the internet devoted to trading and investing strategies, the excited trader then starts devouring every bit of information they can get hold of. Their new-found knowledge will certainly ensure success - right?
Quite possibly, with this newly acquired plethora of knowledge, trading can go pretty well for a time. Sooner or later, at some point when they hit a snag and see their profits starting to dwindle, the thought then naturally occurs "what am I doing wrong?" It can be both frustrating and disappointing. It's not monopoly money you're playing with, after all.
Time to reign things in and get a real Stock Trading Plan. That's what's been missing from the start. Even when you set out with the best of intentions, and armed to the teeth with all the knowledge available - if there isn't a proper Trading Plan to follow, you're doomed to failure. You just can't implement everything at the same time. You have to pick a few strategies - and stick with them.
It seems so simple, doesn't it? But in our information age, it's so easy to get overwhelmed with all the available knowledge; use a little of this, a little of that, and you just end up hurting yourself and getting discouraged. It's wise to use a few strategies when you know how to implement them, and that in itself becomes a strategy that will work for you when you know what you're doing.
It's more than wise to devote some time to create a stock trading plan for yourself - and stay the course. Stick with your plan, and make adjustments along the way. See what works and what doesn't work so well for you. In doing that you will educate yourself by understanding the why of what works and what doesn't. This can only help to improve your overall trading plan.
Learn from your mistakes - like every other trader has done before you. Don't give up, only to start over from scratch. Put your lessons to good use in adjusting your trading plan. But above all - have a plan.
Edited article from stocktrading4wealth