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New Traders

You are here because you read or heard about someone who has “made a killing” in the market. Or you have been lured to the stock market by the promise of easy money or quick bucks. Maybe you hate your job and want to trade from home for a few hours in the morning and spend the rest of the day sitting on the beach or some other fantasy.

If that’s why you are here, you are at the wrong place. Just drop me line and I will send you a list of web sites that promise quick fortunes. Quick large profits happen as often as winning a state lottery. It can happen…it just usually happens to someone else. And lotteries can’t be relied upon to bring in a monthly income.

Ask yourself – How good a trader are you? How’s this for a statistic. Over 70% of people trading less than 1 year consider themselves good traders. However, 95% of those same traders were losing money. And over 90% within 1 year of starting to trade will quit trading out of disgust or loss of money or both.

Too many traders enter the market without the proper tools. They fail to use the appropriate systems and methods to trade. The market no longer need be the domain of the professional trader. Traders who have the time, capital, persistence, motivation, knowledge and methodology will succeed. We are going to give you the techniques and systems that the professional use.

Not As Easy As It Looks

The ease of purchasing stocks has given the impression that trading is an easy way to make a living. All you need is to open a brokerage account, fund it, and find a method of trading…and most new traders wonder why cash is not rolling into their bank accounts. Most of us when purchasing a car or house do research, check some buying reports and agonize for weeks before the purchase. Most people buy stocks on a whim or just a recommendation and then watch their non existent profits dwindle away till all that is left is a loss. If you do not do the proper work, you losses will be someone else’s profits.

Recommendations

1) Read through the section Beginnings

2) Try trading a real system. None of this touchy feely stuff – I think my stock will go up or I heard on CNBC… In spite of the money the Wall Street analysts make; they have no clue if and when the market or a stock is going to rise. I discuss this more in the sections in the Beginnings. Making money in the market is strictly a percentage game. You are going to win a percentage of trades; you are going to loss a percentage of trades. Period. If you can minimize the losses in bad trade maximize the profits, you will make money.

Try using the the 3 Day Hammer. It works and many traders use it either as a stand alone system or with other indicators.

The best advice I ever read was from the book Street Smarts

All you need is one pattern to make a Living! Learn first to specialize in doing one thing well.”
-Linda Bradford Rashke

3) Practice and stick with one system. I recommend you practice trading on paper for a short trial period, so you see for yourself how the system works before you start committing real money. Once you see how you trade in theory, start trading in real markets. The key is not necessarily what system you use or how much capital you start with. What matters is that you start, and that you stick with the system.

4)If you don’t want to follow a plan, you will eventually be throwing money away. There are a zillion great systems out there that you can create, borrow or buy. The 3 Day Hammer has paid my bills. It works, but only if you stick to it.

I’m going to end this section with a few pros and cons of trading.

Trading an be very profitable

  • Pro. Trading with the proper techniques and skills can make money. It is one of the few ways that a small sum of money can become a fortune.
  • Con. The majority of people who trade will not make money. Most will lose money. But most traders do not have a good trading system.

You do not need large sums of money to trade

  • Pro. Absolutely true. But…the odds of success are correlated with the amount of starting capital. The more you begin with, the more likely you odds of success.
  • Con. If your starting capital is small and you do not use great money management and risk reduction techniques, you will be eliminated after a few losses.

Stock volatility creates trading opportunities

  • Pro. The greater the market and stock volatility, the greater the opportunity for profits.
  • Con. If you do not have the proper skills and techniques, you will become trading road kill.

Commitment

  • Pro. If you work hard, put in the effort and acquire the skills, trading can be very profitable and you can live the dream.
  • Con. It does require effort and work. You are competing against some of the smartest capitalists on the planet.
     

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