3 Important Stock Trading Basics Trading offers an opportunity to create good cash flow, once you have developed your mindset sufficiently and 'learned the rules of the trade'.
Also, trading may involve heavy losses, which must be minimised with a strong development of your mindset.
To become a successful trader in the stock market, you must possess what I call the three 'M's.
1.
Mind - A disciplined mind is an absolute requirement for successful trading.
Managed to conquer the devils of greed and fear is going to enable you to become a successful trader.
Learn to manage your emotions.
Don't ignore change in mass psychology.
Trade less often.
Trading is deceptively easy.
Goal is to trade well and not to make money! If you trade well, you will make money.
2.
Method - There must be a plan or methodology to trading not based on tips, hunches, visions or dreams.
You must develop a personalised trading plan.
Without a trading plan, you are setting yourself up for failure.
It is not only important to have a trading plan but most importantly, you have to be disciplined and stick to your trading plan! 3.
Money Management - This is possibly the most important factor in trading.
The first goal of money management is survival.
You need to avoid risk that can put you out of business.
The second goal is to earn a steady return and the third is to improve on the 2nd.
You need to remember that trading in the correct way, with the 3 'M's in mind will make you money.
If your target is just to earn money instead of trading in the proper way, this may lead to the loss of a huge sum of money.