Method of Day Trader

Taking charge in the management of your money in today's world is perhaps one of the most important financial imperatives facing us all. This active list should serve you well, and possibly keep you from becoming a fool of the market and false media report. In my fifteen plus years of investing experience I have found these rules to be an helpful way of keeping me set on the trade.

My Rules of Investing in stocks

1.Trade companies With A Plan.
Set objectives prior you ever buy. Set all outcomes, not only what you will do when it goes right, but what you will do whether you are wrong. Determine the amount of capital you are willing to lose and conversely, mark out when you will take profits.
Allowing the market take out of your profits by holding on to a losing trade is not a right strategy. Write down a trading rules on paper and follow it. Do not become a causality of emotionally involved buying or selling.

2. Always Check a Chart.
Never buy a stock without checking a chart of the stock first. Look at the one year trading range. Make sure where you currently are in the trend and what that trend is. Never trade against the trend. Buying and selling decisions are technical in nature. Fundamentals will never tell when to buy or sell a stock. Always look at a chart for entry price and exit timing decisions.

3. Follow a Trend.
Your probabilities of success are far greater if you Follow a definable market trend. Statistically, these trends give better profit potential with a lower amount of risk. A good rule for some investors to watch a 50-day or 200-day exponential moving average of the close. This moving average represents the intermediate trend of a stock. A 10-day exponential moving average represents short-term trend. The use of these three moving averages should yield good results in keeping you in the trend. If you spot the trend starting to change, act accordingly by taking profits or placing stops to protect your capital and locking in a profit.

4. Buy and Sell on Confidence.
Many times you won't feel quite right about a buy or sell decision. If this feeling persists after you have done all your research and you have followed the rules to this point, don't take the trade. Too many times investors try to rationalize a decision. Don't try to find a good reason for making a bad decision. Your decision must be a confident one.

5. Always use Stops.
The proper use of stops would protect profits and limit your losses. Look at stops as profit and loss insurance. When you enter a trade, you place a stop to limit the loss in case the trade goes against you. When the trade becomes profitable, you use them to lock in a profit.

6. Be patient and let time be your Companion.
Making money safely takes time. The only time to hurry is if you're in trouble. Only because you like to trade doesn't mean you should. Only trade when the probabilities are in your favor, and allow the market come to you. The market is going to do what it is going to do and what you want is irrelevant. Don't become addicted to the action. Profits are made the old fashioned way, one trade at a time. Be calm and make time your partner instead of your enemy.

7. Learn from your Mistakes.
The most successful traders and aggressive investors learn from their mistakes. Many even go as far as writing down what went wrong and analyzing the problem. Mistakes can be costly, so use them as learning experiences and try not to make the same mistake over again.

8. Know how to short Stock.
Markets do not go up all the time, a hard lesson some have learned over the 2008. Does that bear market mean that you can not make profit?
No.
Common sense says you are to follow the trend. So if the trend has been down, why haven't you been shorting stocks? The reason is sadly fear and ignorance. Just 8% of stock traders ever shorts a stock in their lifetime. This is terrible when you become aware of that markets and stocks fall 67% to 80% faster than they rise. In other words shorting stocks tends to make money faster than buying a stock to go long. And, if you can make money when the market is going down and when it goes up, what is it that you have to be afraid of?
Professional traders have made millions the last three years. You must learn to short stocks if you are to have any prospects of being successful in today's markets. Fear and ignorance must be beaten because you must know how to short.

Always remember, it's your money. Take control of it and follow the rules.

P.S. eBook: "Follow our trades" by Company EYE