How to Trade Stocks: How to be a Highly Successful Trader

How to Trade Stocks

Let’s talk about how to trade stocks. what does it take to be a highly successful trader? You see, most people want to trade. And then again, they are fearful and say, OK. What do I need? And often, they are focused on the wrong things.

How to trade stocks: 3 Things you need to be successful

how to trade stocks

The first thing that you need is money.

DUH! Yes, but when trading, it takes moneyto make money. You need to have at least $10,000 in your account.

But the good news is that many peoplealready have $10,000 somewhere in a 401k, in an IRA, that right now is notdoing anything. And there are ways how you can use that money to start trading.

However, if you don’t have any money,trading is not magically putting money into your account.

So, the first thing is, make sure that you haveat least $10,000.

One of the biggest mistakes that I see traders making is…

They start trading with too little money.They hope that they can make a living with trading starting with only $1,000.And you see, this is not realistic.

You need at least $10,000 to get startedbecause you want to apply the 2% rule. What does this mean? The 2% rule means:always limit your risk to 2% of your account.

Now, with a $10,000 account, this meansthat you can risk $200 and honestly, that’s what you need to trade in themarkets because if you risk less than $200, there’s not much money to be made.

The second thing you need is a proven trading system.

What does this mean? Well, first of all,here’s what a trading system is. A trading system tells you three things.

  1. It tells you what to trade. Sohere, specifically what stocks to trade.
  2. It tells you exactly when tobuy or sell a stock so, when to enter.
  3. And it tells you when to exit.I like to distinguish the exits between a stop loss. When the trade goesagainst you and a profit target.

So you need to have a trading system withvery clear rules so that you know exactly what to do in any given moment. Youhave seen my charts. You see that right now; I already know when to exit.

So, I entered and now I have my trade onautopilot. I do not use any discretion in my trading, right? I have my rules,and I have my trading system, and I follow this system.

Now, why do I say a “proven” trading system?

Well, you want to make sure that thetrading system that you’re using actually works and what’s the easiest way tofind a trading system that works? Talk to somebody who is actually using italready and has success with it, right?

Don’t try to develop your own system. Imade this mistake in the beginning. I remember back in 1996, I startedprogramming my own trading systems because I thought: I have a programmingdegree, right? I’m smart enough to program my own system.

You know what? That didn’t go well. Iwasted three years chasing the Holy Grail. Just look for somebody who has aproven trading system and follow this.

Ifyou’re interested in the trading system that I personally use, go to:

http://www.mytradingroutine.com.That’s where you’ll see a video that shows you exactly how I find the beststocks to trade, when to enter, and when I exit.

The third is: You have to have the discipline to follow their system.

Let’s talk about the example that I had today.

I entered a stock, SLCA, and I had myprofit target in the market, and it was at $16.96. And today, it went up to$16.90 – just shy of my profit target, then it stopped and reversed.

So did I panic or tinker with this? No, notat all right. I mean, I have my system. I know that in the long run, it willwork out when I follow the system.

Recap: 3 things you need to be a successfultrader:

  • Number one, you’ve got to havesome money.
  • Number two, you need a proventrading system.
  • And number three, and this onyou, you need to have the discipline to follow this system.

If you enjoyed reading this article, leave a comment below.

Read Next: Everything you’ve ever wanted is on the other side of fear

Like it? - Share it!

Leave a Reply 0 comments