StockTradingMaster asked:

www.guerillastocktrading.com There were so many mistakes that I made along the way to losing everything. Clearly I was quite depressed about how much I had lost. What made it even more sad was that it was my entire nest egg. That money was everything to me. It was all my hopes and dreams, particularly when you compound this amount at some 4% or 5% for maybe 40 to 50 years ahead of me. I sat down long and hard, reviewed all of my errors, and tried to understand my stock trading and investing lessons. My wife asked why I was doing it at all, waking up at 6:00am PST for so many mornings to trade stocks, reading hundreds of books about stock trading, and yet I had zilch to show for it, but a large hole in the pocket and heart. It was a powerful question, and I had an uncommon answer. My answer was “I prefer to lose it all now in my thirties, rather than losing it all in my fifties. Provided I be taught my lessons early, I would not make the same gigantic errors much later. These days, I’m trading and investing some $15000. One day, I hope to be managing and investing one million dollars. I can afford to lose $10000 in my thirties, but I will not be able to afford to lose even 20% of a million dollars later in life.” Right, I was in grief from my deep loss. But I was so unwavering in continuing my stock trading and investing, and I was sure that one day I would be managing a much larger amount. Because I knew I would be investing for the next 30 years or more, the earlier I b…/b

If you are going to be successful in stock trading, you need to figure out which trading strategy best suits you. This means taking into account your needs and resources, your expectations for return, and your tolerance for risk. Even things like your age should be considered when you are choosing a trading strategy. In this article, we’re going to look at some popular approaches to stock trading that are effective in today’s market.

Becoming a Day Trader – The term “day trader” refers to the fact that stock traders who use this approach buy and sell stocks within a single day, not holding a stock overnight. They make money by capitalizing on short-term fluctuations in the stock market, and avoid the risk of being exposed to changes in the market overnight. You can reduce the risks involved with day trading by sticking with quick, small profits rather than waiting for a stock to hit its peak. As with all other forms of trading, there are always disadvantages. Day trading is a lot of work; you have to remain vigilant throughout the stock trading day. In addition, since brokers charge a commission on each trade, your gains have to outpace the cost of frequent trading.

The Swing Trader – Instead of day trading, you can hold your position in the market longer, for days or weeks, and look for opportunities to make larger profits. This type of trading is called swing trading. Because you are making fewer trades, you don’t incur as many commission charges. The profits can be larger and you are less likely to be pressured into making a mistake. Swing traders frequently use technical analysis to determine when they should buy and sell a stock. The key points are identified based on the percentage of profit that the swing trader wishes to hit. It is important to keep in mind that typically the higher the percentage, the higher the risk. Because you are making fewer trades, you do have to go for a higher profit on each trade, so this additional risk has to be taken into account. In addition, you have to consider the risks associate to be exposed to market fluctuations for a longer period of time.

The Longer-Term Swing Trader – If you take this approach, you are basically following the same strategy as the swing trader described above, except that you hold the stocks longer. Trades are usually made over a period of months. You can use this approach to trading when focusing on stock indexes and mutual funds, or through technical and fundamental analysis of individual stocks. The advantage to taking a longer-term approach is that you avoid being distracted by noise in the data, which occurs in all markets. Small fluctuations are less important because you are looking at longer-term trends, though you cannot ignore them entirely. Again, the longer you are holding the position, the greater the profit percentage you need to shoot for. In the case of long-term swing trading, you may want to set a profit target much higher than those found in day trading. The disadvantage to this approach is that you are not well positioned to capitalize on any short-term movements in the market, and your risk may grow with the amount of time the stock is held.

Buy and Hold Trading – In this approach, you hold stocks for years at a time. If you choose them correctly, you can make a good profit with very little cost or effort beyond the initial selection of the stocks. Unfortunately, in many cases this approach is more aptly named the “buy and forget” strategy. Many investors who hold stocks for a long period of time are not actively carrying out a long-term trading strategy, but just picking up stocks and holding on to them for no particularly good reason. It may generally be better, even if you plan on holding on to a stock for a long time, to approach trading as a long-term swing trader. That way, if the stock does become less attractive over time, you are positioned to minimize your losses and maximize your gains. Go into the market with clear goals, and you will be better prepared.

By: Carl G. Robertts

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BY.-  http://www.PracticalDayTrading.com

It’s no secret that day trading can be a very lucrative, yet highly competitive field, and the truth is that the stock market doesn’t care if you are an experienced or a beginner trader.

The rules and the opportunities are the same for everyone, so either you are going to make money when you pick a stock and make a trade or you are simply going to lose it in favor of the more seasoned ones.

It won’t matter if we are in a recession or we have a great economy. Gamblers and ignorants loose money consistently either way. While experienced and Profitable traders make money in good or bad times. The trick is to learn how to do it.

As a day trader your homework is all about studying and testing different market strategies that can help you take advantage of stocks while at the same time protect your gains.

Just always keep in mind that a good strategy is simple and practical. Complicated stock systems will always make you slow in your decision making process or confuse you from the start.

 

A trader must always read as much as he can. There is simply no other way to prepare one self for this difficult yet incredibly rewarding activity, but to read and put into practice as much ideas as you can, at least by paper trading first.

The are a lot of books on the subject that pretend to help you, however many of them where written 6 or 8 years ago and that kind of makes them obsolete in this constantly changing field.

Fortunately there are some practical day trading sites on the web where you can access proven trading strategies that are easy to implement. One of those sites is http://www.PracticalDayTrading.com

They focus on stock trading methodologies that can help you identify and take advantage of certain stocks with momentum, while limiting your risk.

Visit them today and improve your stock trading potential in 2009.