Now that you have an account and you know how to execute BUY and SELL of stocks, I will discuss the MECHANICS of STOCK MARKET TRADING.
I started stock market out of nowhere and I used to be trigger happy pushing that BUY and SELL button. Success in Stock Market Trading do not account your frequency in buying/selling stocks or how long you hold your stock position. WHAT REALLY MATTERS IS IF YOU MADE A PROFIT OR GAIN IN STOCK MARKET. That is what matters and nothing more nothing less!!!
Everybody who goes to stock market trading wants to earn a profit/gain. They did not come to stock market just to lose money. Majority of the stock market traders with big portfolio are managed by experts in stock market so you have to prepared and fully equipped before you pull the trigger of BUY and SELL button.
The basic notion of us Filipinos especially the poor class/middle class is that we open an account in stock market so that we will multiply our money in short span of time. Guys, that is me when I first open my account. Most stock market newbies who are not prepared lose money in stocks.
Most probably, you had read the book of Bo Sanchez entitled My Maid Invests in the Stock Market (PDF Copy of Short Version) and you might assume you can also do better because they are just maid. The title of the book is quite misleading if you have not read the book. The maid made good investment decision because they had a direct mentor and you do not have. I am not advertising but you can subscribe on their group "Truly Rich Club" but what I can say is that you will never be independent if you keep relying to a mentor. Please take note that Bo Sanchez is into stock market investing while I prefer stock market trading. Anyway, I will include discussing stock market investing later so you will have an idea.
Okay too much gerger on my end but what I really want to say is Please Equipped Yourself First before plunging to this war zone of stock market. Before you execute a BUY then you should have a TRADE PLAN.
At least help yourself to understand the following:
- Your Environment - By example, I am company employed hence I can't engaged in Day Trading or Momentum Trading. This is where you buy in the morning and sell in the afternoon sort of thing. Or maybe you do not have your own internet connection and can only access internet during weekend at an internet cafe hence I suggest you go for long term investing or position trading.
- Personality Check - Try to assess your personality. If you are aggressive like me then follow along with my stock market trading but if you are patient then maybe go for stock market investing. Your emotions will be tested especially when you are losing money but I say, stay positive. You can do it.
- Fundamental Analysis - The Basics of Company Information (See provided link on my blog)
- Technical Analysis - The Basics in the Art of Indicator Analysis (See provided link on my blog)
- Experience The Trading - This is the most important part. Try smaller amount first and do not go all in. Because as they say "Good Judgment Comes From Experience, and a Lot of That Comes From Bad Judgment - Jason Statham The Mechanic".
Let me Diagram to you the Stock Market using the movie entitled "The Mechanic".
"THE PREPARATION"
EXECUTION STAGE
- Check your Volume Analysis, MACD, Trend Analysis
- Remember to Just Follow the Trend, Elliot Wave
- Watch out for Break Out Usually Triggered by News or Disclosures. If you join this scenario's then watch out as you usually entered in the middle of the race. Know when to Lock In Profit
- Check the Volume
- Watch out for the Support and Resistance
- Fibonacci, Stochastics, RSI
- Fibonacci Retracement
- Moving Averages
- Stochastic, RSI(Oversold)
- Elliot Wave
- Candle Sticks (Bullish Hammer
EXIT STAGE
- Check Candlestick (Hanging Man, Doji)
- Check Fibonacci
- Check Support and Resistance
- Check Stochastic, RSI (Overbought)
- Set Stop Loss and Follow the Plan
- The Stock Market is Merciless so Cut Loss to Minimize Your Loss if the Trend Goes Against You
END
Good Luck!