Going Broke in the Stock Market can be easily accomplished if you put your mind to it
I know there are many people who love to talk about trading stocks and how to be successful in doing it. Including myself.
Many people want to know what they need to do to make money in trading stocks, right?
But lets reverse it to get a little perspective on it.
Lets ask,what mistakes can people do to assure they lose money and lose big time? Maybe this will unravel some people to make them think a second or two about how to pursue Trading and in particular Long Term Swing Trading (holding a position 1 day up to 3 months) and what they need to do to reach their goals.!
But I don’t know, maybe some of you out there are Masochists and would love to participate in accomplishing something that could make your finances tumble into oblivion. People have done weirder things before. Laughing
So without further ado to all you lovers of pain:
The 5 ingenious ways that guarantee you will go bankrupt Investing and Swing Trading in the stock market.
1. Go ahead and throw that Christmas Bonus at the Markets as it is easy money.
Yeah why not, you have earned it. Go ahead and put in the market and start trading. We all know it is such easy money. Yeah right! I have seen this scenario so many times in my Life. A person looks at a few other people who have done really well Trading and figure it is pretty easy. You just Buy low and Sell Higher. That is all you need to know levitra 5 mg and viola you have made yourself a quick buck. If only it were that easy. It is just not. Sure some get lucky and make a few first time picks that are profitable. You even may get a huge profit starting right away. But eventually without any trading plan you will find yourself in the poor house sooner or later. It’s that simple.
So put the Bonus money away until you have studied the X’s and O’s of trading. Those guys that have inspired you to jump in… well ask them questions and see how they do it before hand. If I had to recommend one book for an Investor or Swing Trader to read before getting in the game it would be William O’Neils, ‘How to Make Money in Stocks’. It is a good starting point. And gives you a solid foundation about stocks and the stock market.
2. Have no control of your Emotions when trading stocks.
Okay, I think one time or another EVERY trader has experienced this phenomenon. It is just part of human nature. You buy a stock at $35 and within a few days it is up to $45, WOW you say. Man, this is making my whole year. Lets party. So you proceed to take your buddies out to Applebies or better yet you go to Hooters and stuff your face with Wings and fries because you are on cloud nine after your small fortune with the Trade.
Conversely, your stock tanks in the next few days off some bad news over in the middle east and it goes down to $22. Oh goodness you have lost $13 a share from your original price. WOW, this really stinks you murmur to yourself. Your Life is put on hold as you go to Hooters ( this time not to celebrate) but to drown your sorrows in beer. You heard the guy on CNBC say the stock will eventually go back up to $50 so you even stick it out longer. Hoping and praying it goes back up. But to your amazement it just keeps on going down. Your feeling pretty desperate and decide to begrudgingly sell out vowing never to return to the Markets.
These kind of emotions will get you nowhere in trading stocks. It will cloud your thinking and will be the demise of your career in Swing Trading and your Account.
3. Do not have any Discipline whatsoever.
This is probably the number one downfall of any Swing Trader. It is intertwined with Emotions but deserves a category all by itself. If you do not develop a prudent trading plan and system that is based on solid criteria then you will go nowhere but down. If you buy a stock and see it start to tumble and hit your stop-loss and you go into your account to lower that stop loss then you may as well go ahead and stamp your ticket to financial ruin. You must identify your entry and exit point of a stock and stick to it no matter what.
I can personally tell you that the best traders you can look at their face and never tell whether they are up $3,000 or down $3,000 for a particular Long Term Swing Trade. They remain discipline and let the Trade and the Price dictate whether they remain in it or get out. And actually do not care one way or the other whether the stock is a winner or loser because if they stick with their Plan the Money will follow.