Trading Strategies For The Share Market
In order to give yourself the best chance of success when trading the share market, in order to minimize your risks you should think about developing your own trading strategy.
A trading strategy formulates a system that you follow regardless of whether the share market is trending up, down or sideways. It is crucial that you also stick to your trading plan as it becomes your greatest friend against your biggest enemy, your emotions. You can from you trading plan determine when to time your entries and exits and also when to bail and cut your losses and begin again. You need to work on developing a strategy that will be make money in any type of share market action. If you find shorting a stock too risky then you can choose to stand aside when the market or the share is trending down. If you want to spend hours formulating your own plan you can but there are plenty of books and resources out there that can help you and its probably less demanding to adopt a trading strategy that has already been proven to work.
Prior to starting investing you need to familiarize yourself with your trading plan as well as apply it to historical price charts to test it out. You need to make sure you do not get sucked in to other people’s opinions that you see on online trading forums as it is usually just that, opinions although over time you can generally workout who knows what they are talking about and who doesn’t.
Keep your trading plan simple! In order to protect yourself from suffering from something known as ‘analysis paralysis’ you need to select a few different technical indicators and stick with them. If you find that your signals are constantly giving you mixed signals then make it even simpler because confusion at the wrong time may cause you to hesitate and you can lose money.
You must learn to control your emotions because they will rule over the most profitable trading strategy and you will lose money if they take over. Some of Wall street’s greatest traders fail as soon as they are given their own money to trade because their emotions come into play and should you panic then you will most surely lose your money.
You should devote some time and money to increasing your knowledge about the stock market before you get started as this will be most beneficial in setting you and your family up for the future.