Trading Secrets: Let’s talk about the top five trading secrets. People ask me all the time what are the secrets I’m using in my trading. Here are the ones you need to know.
Top 5 Trading Secrets Revealed
Trading Secrets: Number 5
Taking stock tips from people “smarter” than you are is a terrible idea. Have your own system.
What do I mean by this?
Don’t listen to the people who are publishing newsletters, or who are on TV giving stock advice. Trust me on this one.
If they knew what they were doing, they wouldn’t have a job and be on TV, publishing newsletters, or working for a major publication, and you know the publications that I talk about, right?
Several times we talked about publications like Motley Fool, CNN.money.com, Business Insider, whatever it might be. There are great publications, but…
I urge you to do your own research.
Recently, I did a blog “What Are the Best Stocks to Pick.” It’s great when you have your own system, and the system that I personally use is very, very simple.
It’s based on only three indicators. I don’t have to rely on anyone and the three indicators are readily available for everyone.
If you would like to know what these three indicators are, and how exactly I trade, please, go to the website that I set up for you. It’s called www.mytradingroutine.com
And on this website, I explain everything in detail. Anyhow, trading secret number five is don’t rely on anybody else. Learn how to read a chart and take action appropriately.
Trading Secret Number 4
Have small but consistent profits.
Every trader has a story about the one trade that makes thousands, or 10’s of thousands of dollars, or maybe a million dollars.
I have a story about this.
I had a spread trade that I put on way back in 2006. It was in the euro dollar and this trade just kept going, and going, and going. That trade tripled my account.
And you will hear these stories about traders that tripled their account, and yes, every now and then you will have a windfall profit. It will happen.
When you trade long enough, that’s automatically what happens. But you know, the secret is to have small, but consistent profits. What do I mean by this?
You have to keep your losses small.
Now, if you have been following me for a while, you know about the 2% rule that I like to use.
Never risk more than 2% of your account on any given trade. And then also, take profits while they are there. The golden rule for me is 1:2. When you risk $100, try to make $200.
So, trading secret number 4 is do not look for these windfall profits. Aim for small but consistent profits.
Trading is a marathon, not a sprint. Make sure that you have the stamina to run the marathon that is called trading.
Trading Secret Number 3
You need money to make money.
How is this a secret? Well, it’s a secret because nobody tells you.
You’ll see so much advertising out there that says learn how to trade a small account. Start with $100 or $1,000. And trust me, it doesn’t work this way.
Yes, for some, it might be bad news, but based on my experience, you need at least $10,000.
When you start with less like $100 or $500, the money is usually gone and here’s why. We just talked about the 2% rule, right?
So, when you have $10,000 account, how much are you allowed to risk on any given trade? 2% of $10,000 is what? $200. We also talked about the golden rule.
When you risk $200 you’re trying to make $400. Now, when you do this, it is very realistic, based on my experience, to make 60% per year, 5% a month. That is realistic.
Don’t listen to others that tell you can make 1000% or 2000%
Again, we talked about this. Windfall profits happen every now and then but consistently… Think about it.
If you can make consistently 60% per year, you’re doing really, really well. If you start with a $10,000 account, that’s $500 per month. That makes sense.
I mean, this is not enough to really make a living with trading, but it is a great way to get started.
That should be your first goal. To make a $100 a week or 4-5 hundred dollars per month. Then you can use money management to grow more aggressively.
It takes money to make money and you should have at least $10,000 before you get started.
Trading Secret Number 2
Keep it simple.
People make trading more complicated. And there’s even people who will tell you trading has to be complicated.
So that they can sell you their complicated education packages that keep going on and on. I like to keep it simple. You know me, I believe that trading can be simple.
When trading, there are only three things that you need.
You need to know what to trade, when exactly to enter and you need to know exactly when to exit.
And again, if you’re interested in learning on how I personally do it, please, go to www.mytradingroutine.com
There’s a 35-minute video that explains everything in detail.
Here’s an important concept
What you believe to be true is true for you.
If you believe that trading has to be complicated, you’ll find a way to make trading more complicated. But if you believe that trading can be simple, as I do, I believe it can be simple.
I believe it so much that I say I KNOW it can be simple, right? And this is why I only have very few rules in my trading.
In fact, I can teach anybody how to trade in a matter of minutes. Go to www.mytradingroutine.com to learn more about this.
Trading Secret Number 1
There are no trading secrets.
You might get advertising that says, here’s the one trick to make a lot of money, or maybe here’s what they don’t want you to know or what the big guys know.
Don’t chase the holy grail.
Too many traders believe that there must be that one secret out there and they start chasing it.
Stop believing that there will be a holy grail and stop believing that there will be something better out there.
When you make small and consistent profits, that’s when you have cracked the code. That is the holy grail.
I urge you to find a trading system that makes sense to you and stick to it.
- Taking stock tips from people that are “smarter” than you is a terrible idea. Have your own system. Take the time that it needs or even better… Take a system from somebody else who knows what he’s doing… Hint
- Aim for small but consistent profits
- You need money to make money. Very few people will tell you that you should have at least $10,000.
- Keep it simple. If you cannot explain it to somebody else in 10 minutes or less, your trading is probably too complicated
- And trading secret number one. There are no secrets. There is no holy grail. I receive the same e-mails you do and see the same advertising – most of this stuff is utterly misleading.
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