Tips For Beginning Traders

These are some tips I wish I had followed when I started trading. It would have saved me a lot of money and frustration.

Never try and chase a stock. If it is a good stock, buy it. Don’t try and catch it with a slight interday dip and keep raising your bid price. Because the moment you get on board, it invarably will drop in price.

Don’t worry that you missed the biggest trade of the year when you didn’t buy that particular stock. Wait 30 minutes, another stock just as good, if not better, will present itself.

Don’t invest with scared money. If you are afraid to lose, you probably will make bad decisions and you will more than likely lose money.

Learn to set trailing stops. Place them immediately when you make a purchase, don’t lower them because you are afraid you may lose money when you first get on board. They are designed to keep you from losing big money. It is better to take a small lose and preserve your capital.

Never buy a stock unless you know what you are going to sell it for. This relates to setting your trailing stock. Know this before you buy, and follow it rigidly.

Understand the rules of the market you are trading. Stocks trade differently than options which trade differently from futures, which trade differently from the forex. There are differences that can cost you if you don't understand them.

If I had followed these simple rules, I would have been much better off. I follow them now and it really does help.