How Wall Street Works:
Many people don’t seem to realize this, but Wall Street is one big competition: If you’re making money, somebody else is losing; and if you’re losing money, somebody else is winning. So if you walk into the fight blind, without any weapons, you are setting yourself up for failure. The main objective here is to obtain as much education & information as possible in order to have the highest chance of success.
So before going any further, I highly recommend PaperMoney with TDAmeritrade . Paper Trading allows you to use a “fake money” account and affords you the opportunity to test strategies and various trading ideas. Shy away from risking your real money until you’re comfortable with executing your strategy. Many traders arrogantly skip this step…
Secondly, I recommend studying up on some Technical Analysis material. At the very least, read The Candlestick Course by Steve Nison. This will provide you with a strong footing in technical analysis. If you really want to be an expert in technical analysis, you can consider Nison’s 4 DVD set of Candle Charting-Essentials and Beyond, but this is not absolutely necessary. All serious traders utilize technical analysis for entry & exit points. Timing the market is key to all types of trading, especially Swing Trading, and can give you an edge over a solid chunk of Wall Street. Many amateurs don’t bother with this….
Thirdly, you should have a Watch List that you actively follow. At the start, this may consist of 5, 10, or 20 stocks maximum that you are actively reading up on. Over time, your watch list will grow. Knowing what a company does, what sector they’re in, when they typically release news, when their next earnings call is, etc. can have a profoundly positive effect on your profits. For this reason, I recommend many different sites for following stocks on your watch list: Yahoo Finance, Business Insider, TechCrunch, Market Watch, The Street, CNN, The Wall Street Journal, and the list goes on and on. At the very least, give your stocks a simple Google search every once in a while for the latest news concerning them. Be sure to study your stocks. Many traders opt out of this task…
Stock Market Tips – Key Takeaways:
- Many people are not trading based on solid information. Be an educated and informed trader. Capitalize on other people’s laziness!
- You have to have a strategy and practice it. Wait until you’re comfortable with that strategy before using a real money account. This learning stage is vital. You must have confidence in your trading before stepping up to the Big Leagues. Check out the strategy I follow and see if it is for you:
- Study technical analysis: disciplined entry and exit points on trades will result in much higher profits.
- Have a watch list and read up on those stocks. Before you know it, you’ll know every stock on your list like the back of your hand: You’ll be able to predict events, news, and corresponding price fluctuations with much better accuracy.
Many people are not following these few rules and their portfolios are suffering because of it. The strategy I follow isn’t about throwing money at a stock and hoping…It involves finding a signal, confirming that signal with another piece of information, and confirming that signal again until I have multiple signals of confirmation, thus providing me with an extremely high chance of success.
Put these tips into action and you will catapult to the top of Wall Street!
Please share your comments & questions below.
Written by Matthew Thomas