| TraderAide.com The Trader's Assistant |
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| Invest, Be Wrong, and Make Money in the Stock Market By Al Thomas I have been trading for several decades and was an exchange member and floor trader for 17 years. You learn fast there or you go broke in a hurry. As you can see I managed to hold my own for a few years until I found the secret and started to become a successful trader. Every professional trader I know knows the one great secret and that is to keep your losses small. We all learned that when we took a position – either long or short – that we better be able to jump out if the trade was not going our way. Many of my friends were scalpers. That means they were trading for just a few ticks and every night went home flat. Flat is no positions at all. Others, myself included, took a longer look and planned to hold a position for a period of time. That could be several days or weeks. If you were right the longer you held on the more money you would make. The general public seems think that exchange members know everything and always made money.Tain’t so. Many traders were wrong more than 50% of the time. Huh? Yes, fifty percent. My account had losses 40% of the time and 20% were scratch trades (neither winners nor losers). You ask, “If you are out of the money 60% of your trades how can you make money?” This is what every professional knows: Keep your losses small and let your profits run. How many times have you heard that one? BUT how many times have you ignored that rule? At the end of the year when you analyze your trades you find that you made $3.00 for each $1.00 you lost you will show a nice big profit. I don’t care what business you are in you don’t put your whole wad on a single outcome and stick with it until it either works or go broke. That is what brokers and mutual fund managers want you to do. They want you to buy, but never sell. It is a tragedy for the small investor today that mutual fund families are putting in selling restrictions to discourage investors from dumping funds that are headed down. Many require long holding periods and if you sell prior to that time they charge an extra fee of 2%. They give lame excuses that I know are not true for doing this. Never buy any fund or trade with any brokerage company that has that kind of rule. It is cheaper to pay the 2% or whatever fee there is and get out than hang around and lose 20% to 40% of your equity. Look back at 2000 to 2003. This can happen again despite what your broker tells you. Be wrong and run home with most of your money. You still have enough to invest in a better opportunity. If you are disciplined to get out of any bad situation early you will end up a rich person. Investment Letter 3-month free trial. Click http://www.mutualfundmagic.com Author of best seller "IF IT DOESN'T GO UP, DON'T BUY IT!" Never lose money in the market. Copyright 2004 Albert W. Thomas All rights reserved. Former 17-year exchange member, floor trader and brokerage company owner. |
| Recommended Reading: Books in addition to those above |
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| Commercail Links The links below all lead to people selling some sort of services to traders and investors. I have no opinion on any of them. |
| The MasterTrader eBook Your complete guide to active trading/day trading. Learn proven strategies and make money consistently! |
| Sure Fire Trading Trading systems, methods and signals. Who else want's to trade like a Pro? |
| The Way To Trade A breakthrough approach to trading in any market |
| Forex Trading Course Learn how to trade EUR/USD, USD/CAD or any other major currency pair. |
| Turn $200 Into $4,630 In 30 Days! Earn money by providing stock research and trading options from your home PC. Step by Step course from a Professional Trader. The Day Trade Forex System The ULTIMATE, Step-By-Step Guide To Online Currency Trading. Online Trading For Financial Freedom Online stock trading, daytrading and short term investing strategy for beginning and experienced traders alike. E-Mini Trading Course Learn how to trade S&P 500 and Nasdaq-100 E-mini contracts. Guide To Profitable Forex Day Trading Learn proven forex strategies currrently used by 2 full time currency traders and make money online consistently. Rapid Fire Swing Trading A Simple But Powerful Overlooked Method of Market Entry and Exit That Has The Highest Probability Of Being Profitable. Day Trading E-Mini S&P Futures Video How To Spot Turning Points in the Market like a Seasoned PRO. |
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