MOST TRADERS FAIL BECAUSE…
...they do not have enough tools to succeed. We are not talking about trading computer, capital, or broker (even though these three are important). For a trader to become successful, his tool belt should include the following: charts, education, experience, risk management system, and sight.
Many financial advisors will tell you charts are your window to the overall market movement. Even the Wall Street utilizes this tool, helping you to formulate a trading plan based on what you perceive a stock is going to do next. Charts help in pinpointing patterns and any kinds of trends the price may be experiencing. A well-formed trading plan makes currency, commodity, option, or stock trading successful.
Knowledge is power. This cliché remains true today. Mastering the art and science of trading cannot be attained overnight. You cannot simply go trading and know everything in one go. You have to attend seminars, take courses, and read books to gain trading knowledge and become a consistent trader.
Being a book geek is a huge step towards achieving success. However, any information you gain from books, courses, or seminars is useless if not applied. You need to put what you have learned into practice through paper trading. Paper trading enables a person to try trading in a risk-free environment before doing the actual trading.
Risk Management System
Failure is the key to success. But not managing your risks is another story. A trader needs to create a plan and place a system to maximize gains and minimize losses. The last thing you want to experience is to let one mistake wipe out all of your money in your trading account.
Here’s a quick refresher on Level I, II, and III access. Level I displays real-time quote trading on the Nasdaq. Level II flashes quotations of each market maker in every Nasdaq-listed security as well as the bidding and offering lots they are searching. Level III shows what is seen in Level II and the following features: enter and execute orders, and transmit information. Ditch the blindfold and look into the market. Find out what is going on, set your vision into the market, analyze the quotes, and trade.
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