Tip 8: Left Money on the Table? There’s Always Another Opportunity

Sometimes we make a winning trade or investment and cash in, only to see the stock continue to rise, now and again by a lot–meaning we could have made a lot more money. Instead of feeling happy about our success, we feel disappointed about missing out.

At the same time, trading and investing are long games. We’re better off when we follow our strategic plan. The home runs in the game are exciting, but at the end of the year winning comes down to consistency.

Also, the great thing about the market is that there are so many financial vehicles (stocks, ETFs/ETNs, REITs, Options, etc.) in so many areas (specific companies, sectors, commodities, currency, etc.) that there is always, always another opportunity to make money. Missing out doesn’t have to last longer than a day.

You can find those opportunities. Many base hits that follow your game plan rather than a few unexpected home runs will make you feel mighty good.

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Tip 7: Do Your Homework with Help (25 Great Websites for Trading and Investing)

A common phrase is to “do your homework” when preparing for something. It’s similar for trading and investing. Researching which stocks have trade-worthy patterns or strong fundamentals is smart.

At the same time, you are only one person with limited resources and time. So, get help with your research. Here’s a list of 25 great websites for trading and investing.

General Information and Analysis

  1. cnbc.com
  2. marketwatch.com
  3. seekingalpha.com
  4. investors.com
  5. finance.yahoo.com
  6. nasdaq.com
  7. money.msn.com
  8. sixfigureinvesting.com
  9. traderhq.com
  10. thestreet.com

Finding Stocks to Trade or Invest In

  1. americanbulls.com
  2. chartmill.com
  3. swingtradebot.com
  4. stockfetcher.com
  5. zacks.com
  6. fool.com
  7. sectorspdr.com
  8. topbreakoutstocks.com
  9. etfdailynews.com

Market Tools

  1. stockcharts.com
  2. elliotwavetrader.net
  3. vixcentral.com

Communities of Traders and Investors

  1. stocktwits.com
  2. twitter.com
  3. etoro.com

Tip 6: Spikes vs Trends

The world in general and the financial world specifically are dynamic. Things can move fast, especially on a short-term basis, and then suddenly feel as if they’ve slowed to the pace of a snail–to only unexpectedly sprint off again. It’s exciting. It’s boring. It’s everything in between.

In such an area of life as the stock market, it’s good to be able to recognize the spikes from the trends. By spikes, we mean a stock or the whole market may shoot up or shoot down for a short period of time, from a shock like five minutes to fifteen minutes to an hour to a full day to a week. After the spike, however, the general trend continues. By trend, we mean the long term pattern, from a few weeks to over a year, remains steady. The trend can be downward or upward or even horizontal in a basing pattern.

It’s easy to, and tempting to, identify a spike as a change in the overall trend of the stock or the market. Yet, to do so will lead to frustration and loss of capital. Remember, as the old adage says, the trend is your friend.

One tool to help clarify whether a new trend is forming is to zoom out with a weekly candlestick chart. Seeing the broader pattern is likely to give a sense of the validity of a change in trend or if the movement is only a spike. Daily candlestick charts may also help, especially when the time frame is visible over months. Possibly the most popular and free charting program is stockcharts.com. Use it.

When crazy things happen, have patience, zoom out to get a bird’s eye view, and stick to your winning strategy.

 

Tip 5: Sometimes You Will Lose Money

Many beginning traders and investors envision quick and great returns from the stock market. They spend days dreaming of what they will do with all of the money, from paying off debt to celebrating with their loved ones in expensive restaurants.

At the same time, they assume that every trade and investment will be a winner. Then, with one loss, even a small one but certainly with a big one, their expectations come crashing down, to only be replaced by fear, confusion, and frustration.

One reason they experience these emotions is because they lack the recognition that every trader and investor loses money. Even the historical and current stock market greats, from Jesse Livermore to Warren Buffet, has lost money on a trade or an investment.

So, if you experience a loss, know that you are in good company. In fact, there are a significant number of traders and investors who have depleted their whole accounts, but have stuck with it (in their practice accounts until they have found new funds), learned from their losses, come back, and are quite wealthy now.

The thing to do, especially before catastrophe happens, is to learn how to keep the losses smaller than the payouts from the winners. This might entail using stop losses or diversifying your portfolio wisely. Some practitioners promote their win ratios. Yet, at the end of the day, high win ratios mean very little if a few losses wipe out all of the profits, and low win ratios mean a great deal if the more abundant losses are kept smaller in terms of money than the settlements of the comparatively fewer successes.

Be calm, know everyone loses money in the stock market at some point, and stick with your winning strategy.