Interested in receiving Free Tips on how to successfully manage your own money? Click HERE and also receive a Free eBook.

Trading ain’t easy, but most traders that I come across seem to make it much more difficult than it needs to be. The easy barrier to entry – all that’s needed is a computer and a brokerage account – initially gives many traders and investors the impression that making money in the markets is child’s play. Just look at a few charts and the money will flow, right?  The rude awakening soon follows after the first dozen trades have been done and emotions (greed and fear) take over and lead to unnecessary losses, which in too many cases turns the trader into a gambler until sooner rather than later the account is depleted.

The reality is that trading can be one of the most fun and rewarding professions there is, but a few key principles must positively be adhered to.

If you are losing money in the markets or are not making as much as you would like to, try to improve on the following three areas and you may be surprised how much more steadily the profits in your account pile up and how much this will help to eliminate stress from trading.

1. You are treating trading as a hobby

The ‘low barrier of entry’ lures people from all walks of life into dabbling in the markets. The world ‘dabbling’ is key here because most traders, no matter how much they might like to succeed treat trading as a hobby or worse, as entertainment. Part of the reason for this is because often the losses or profits don’t feel real as a result of no cold hard cash changes hands. Pressing a button and seeing realized gains or losses on a screen has a much different psychological effect than.

In reality all traders want to make money but few look at it as the serious business it should be regarded as. Trading, or managing your own money in general is a lifestyle change. Take control of your own destiny by managing your own money, but you must treat it as a business. Like any business this means having a well-defined plan, a budget, and a rigid schedule.

2. You are not using stops

Trading is all about having a plan and being able to  honor every little intricacy of this plan. For if we can’t adhere to our plan, what’s the point in having one in the first place? Admittedly, sticking to a plan takes time to learn, but there is a shortcut that will immediately and automatically limit the risk on any trade and cut out your emotions: Add a stop-loss and a profit target order to each and every trade that you do. Hundreds of investing and trading books have talked about this yet when I speak to traders, both novices and pundits, less than half of them use stop-loss and profit target orders. Don’t make trading more difficult than it needs to be, use your broker’s stop-loss and profit target orders feature.

3. You are listening to ‘stock tips’ from ‘friends’

I love a good stock pick as much as the next guy. Over the past 15 years as a trader however  I have learned never to execute on a stock pick unless and until I have done my own due diligence and qualified it as a valid setup as if the initial ‘tip’ did not come from that friend. Most folks fall into the trap of believing that the tipster has some insight that he otherwise would not have access to. You can be sure however that 99% of the time he/she doesn’t ‘know something.’ Do your own research, it’s your money after all that you are putting to work.

Remember, managing your own money is a lifestyle.

Interested in receiving Free Tips on how to successfully manage your own money? Click HERE and also receive a Free eBook.

 

 

 

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