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Trading Successfully Requires Patience
Many traders anticipate instead of following what the market is actually doing. You need to react to what the market is telling you by its behavior. You want to put as many factors as possible in your favor before taking a position in the market. One key factor is to listen to what the market is telling you. You need to wait for an excellent opportunity to present itself before taking any action. Let's say a stock you are considering has been in a consolidation pattern for 2 months. The price has stayed between 26 and 30 dollars per share during this time. You get tired of waiting and buy 100 shares at 29.50. In no time your stock starts going down because of the resistance around 30 dollars. You hang on and your stock breaks below 26 dollars on heavy volume. Now you are facing a huge loss, especially if you don't exit the position immediately. What you should have done is waited for the stock to break above 30 dollars per share on solid volume. A stock that breaks through resistance, especially on heavy volume, has a very good chance to keep advancing from this point. You need to have the patience to wait for a trade to develop and then only take a position when your trading plan tells you to do so. Once you're in a winning position, then you must have the patience to stay with your stock until the weight of the evidence, through your trading plan, tells you to exit the trade. This is not easy because of the psychology involved in trading. Many times what is normal human nature does not work well when it comes to trading or investing. In summary, you need to have a successful trading plan and the patience to wait for just the right opportunity when the odds are strongly in your favor. Once the position you've taken moves in your favor, then you need the patience to wait until you get an actual sell signal before exiting. Remember to always cut all losses short. Article Directory: http://www.articledashboard.com Gary E Kerkow is the founder of Tradingmarkets4u.com. This site provides information to help traders and investors become successful. Kerkow has over 20 years of trading experience including stocks, futures and options. He implements the strategies, methods, techniques, principles and psychology of the world's best traders and investors. This includes Jesse Livermore, William J O'Neil and others. Visit my website at www.tradingmarkets4u.com |
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