Hi money-making Trader-to-be,
Today it’s time to revisit the three parts of a good Trading Plan. Sure, there’s many resources, books and information out there but if you cannot see the basics, you will end up blinded by info over-load and lose your money. Trading is simple, remember the stock price can go up, side or down, but we complicate and cloud with our own prism glass. Being simplcity-focus is key to survival and profitable investment decisions.
This is called the 3M of trading, namely, method of selecting the stocks to buy, management of each trade in terms of capital, risk and rewards criteria and finally the mind-set of a positive trader.
Each M is important for any trader but the last M = Mindset is the foundation of all successful trading plans. Forget this one, and money is gone faster before you can say goodbye.
This post covers the first M, name method of selection of stocks to purchase. Of course, one is aware of several methods but what’s important for you is to find not the right method, there’s literally dozens for any Trader, but the one you think gives you the confidence.
How you choose a stock can be dependent upon your amount of money available, technical indicators, fundamental sound companies, throw a dart, rumors, current market favorites etc. It doesn’t matter what method but it just must the be one you are comfortable with. If you cannot decide one, just pick one and later you can change it. If not, the “Secrets of Successful Traders” by Anthony Green is a great start on how to pick stocks.
That’s the beauty of stock trading. Nothing is permanent. Whatever it is, you must begin the first M, choose a method to select what stocks you want to buy. If you ain’t got a style of choosing the stock, please do not trade, you will only be a sacrificial lamb. You will become the blood donor, all your money will squeezed out of you in very short succession.
By now you will decide a Method, by all means, something you will write down and follow that method whenever you come to the market.
This is the beginning of the your Trading Plan.
Till then,Happy Kaizen Trading!