How can you make online stock trading effective?

Online stock trading: Few points to keep in mind:

Online Stock Trading

Online stock trading is not something that can be done in a jiffy. It’s a game of millions or even billions, so it must be catered to with sagacity. Following are some of the tips that would assist you in making your online stock trading effective and efficacious.

Choose your Trading Style

You must be aware of the fact that which trading style suits you the most. You can go for the day trading, where the trade is closed each day or you can become a weekly or monthly trader. Nevertheless, it is imperative for you to evaluate the best option for you, so that so could perform effectively.

Choosing the right Stock Broker

If you do not hold much knowledge about the online stock trade, then you may consider hiring a broker. The stockbroker will assist you in securing the reasonable gains. However, it is equally important for you to have an eye on the activity of the broker, so that you may avoid any risks of being defrauded. Continue reading “How can you make online stock trading effective?”

The Elements of a Trading Plan

The Elements of a Trading Plan
(A primer)

Elements of Trading plan

Trading is an exciting and incredible world. It is also the world in which money flows easily and, considering that the majority of people lose money, it must mean that the money flows away from the majority to the few. In this world of excitement, it is very easy to either go broke or at least lose all your trading account.

The four elements of a complete Trading Plan

In general, there are four key elements to a successful trading plan.

1. An overall strategy for the management and control of your money

2. A method of determining entry level

3. A method for determining an exit level

4. Stop Loss / Profit levels

Intertwined with these key areas is an in-depth understanding of why it is that you trade. So maybe, before we move on to look at each of these key points, you could ask yourself three questions.
Why do I trade?
Can I afford to trade?
What do I expect to get from trading?

Some people are gamblers, some trade for entertainment and excitement, some do it for a living to put food on the table for their family, while others use trading to relieve emotional and psychological pressures. Very, very few actually trade to buy private jets and Porsche!
Your trading plan is a very personal document. It has to suit you. It has to suit your financial profile and enthusiasm for risk. It has to be YOUR TRADING PLAN.

Key 1
An overall strategy for management and control of your money

What markets do you want to trade? What is the size of the margins? How many options can I buy for $X? These are the common questions which many would-be traders ask when they first start out. And as most people starting out on a new journey, they are asking all the wrong questions.

Anthony Robbins, of Awaken The Giant Within fame, says that the quality of our life is determined by the quality of the questions we ask. Maybe what we need to do first is find out what the best questions are to ask. Often people are surprised when they consider the questions I am about to raise?
How much money do you have to put into this venture? (This is the easiest one)

  • What portion is it of your net worth? (It needs to be a small percentage)
  • How much money could you lose in one event and still feel okay about yourself and your plan? (Because trading is all about learning how to take losses)
  • Are you aware that you are setting up a business? (Because you are)
  • Where have you sought advice to date in developing your own trading plan?
  • When do you intend to start? (Certainly not until after your education is underway)
  • What education have you undertaken to help you in your trading? (Many of life’s skills may help or hinder. You need to learn a great deal about trading before you call a broker)
    There are many more pertinent questions that need to be asked but these will suffice for the moment to indicate that trading is a serious business which involves a great deal of learning. Losing trades must be viewed as learning experiences, especially the expensive ones.
    All things considered, I would hope that it is becoming apparent that trading education is appearing to be a wise investment

Often early lessons, formerly called losses, need to be reviewed and explained so that the underlying, and seemingly obscure lessons about market emotions and market action can be understood. In some of these cases, you may have learned a lot but paid a higher than necessary price.

Key 2
A method of determining entry levels

Your approach for determining entry levels also needs to include a process for selecting a market sector, stock, commodity or futures contract. Whether you feel the indicator ADX is better than triple moving averages is for you to determine. But you must determine it for yourself in the market sectors you want to trade.

Currencies, equities, and futures all have their own idiosyncrasies which may have an effect on your trading style. So might your personal knowledge. For example, while ‘mineral’ people know a lot about minerals and mineral markets, they probably know little about IT high tech areas.

It has often been said that Technical Analysis is about probability. You need to satisfy yourself that the statistics being bandied about work for you in your market.

Remember the quality of the analysis depends on the quality of your questions. Although, initially, any questions will do, as long as you do ask and then seek the answers. In time you will develop a feel for improving the quality of your questions. Continue reading “The Elements of a Trading Plan”

Three ingredients of Successful trading

Successful trading

Successful Trading is dependent on three Ingredients:

Successful trading relies on the perfect mix of three key ingredients for each unique individual. With so many permutations and combinations, the number of possibilities is as varied as there are people thinking about trading

Through a process of continually refining and exploring these three key elements, it is possible to increase your profit potential in trading.

Trading Psychology

Acclaimed and successful traders, Ray Barros, Daryl Guppy and Ray Kelly all say that the most important aspect of trading is understanding the psychology of both yourself and the market. The Trading Plan Review can introduce you to these and other successful trading philosophies and attitudes.

When people look at a chart of prices or market action, novices often think they are only looking at a graph or record of prices that were traded. The reality is that behind every sale, every price move, there are the emotions which drove people to decide to buy, sell or stay out of the market.

Trading is all about understanding crowd dynamics. Speculating on what crowds will do next. Some feel that market movements are random, displaying no pattern or predictable behavior. Others feel that crowds of traders behave in very predictable ways. Predictable to the point of being profitable.

Another aspect of Trading Psychology is learning about your own motives for trading. If it is pure to make money, then you will find this profession stressful and devoid of pleasure. With this mindset, your chance of trading success will be very low

In the same way that a tip is a reward for good service in a restaurant, in trading, profits are the reward for trading success. Focusing on making money alone will often see novice traders closing out winning trades too early and allowing losing ones to become poor ‘long-term investments.’ You have to learn to enjoy the analysis and the challenge.

Successful Trader, learn to know thyself…!!

Sound Money Management

With good money management, profits can be increased by a factor of ten, or so the super and successful traders say. If we could help you turn every dollar you earn into 10 more, then do you think it would be worth giving us a call?

It has been demonstrated in numerous studies that it doesn’t matter where you get into the market. Profits from successful trading come from, firstly, wise money management in deciding how much to invest in each trade, and secondly, managing your profits as they build.

There is no such thing as playing with the market’s money. Once you are in profit, it is your profit!

The Trading Plan

Often viewed as the most important aspect of successful trading, the trading plan is actually the least important of the three keys.

Don’t get me wrong. A trading plan, with an edge, as an essential key element in any successful approach to trading. With us, you can learn the five keys to developing a successful trading plan. Consider the trading process similar to a bike chain where the trading plan represents 10 of the hundred links in the chain. It doesn’t matter how good or bad the other links are, a faulty link anywhere in the chain will stop all of it from working. A strong link cannot cover for a poor one elsewhere in the chain.

With this thought in mind, at least in the short term, any plan is better than no plan at all.

Plans with consistent profit returns and small drawdowns are possible. BUT you will find that you cannot simply take, borrow or buy another person’s plan and trade it. Every trader will add variations because they feel that those refinements give them an edge or add to their existing edge. The variations may also be added due to personal preferences or money management considerations.

Therefore, your Trading Plan becomes a reflection of your own personality and attitudes towards risk, fair profits and your ability to do the required research, whether it is fundamental or technical.Being aware of this trading plan design characteristic is a further key aspect of developing a sound trading plan. And this takes us all back to the arena of Trading Psychology.

Additional Tools required for successful trading are:

Whether you are a day trader or a long-term investor, you need to have a few things in your tool-kit that will help to choose winning trades. A reliable broker is an important factor. You can find online brokers that let you do all of your decision-making yourself and pay very low commissions, or, if you need a little more professional support, you can sign up with a full-service broker that charges a lot more but gives you personal service. But, obtaining a reliable broker is not the primary tool in your trading toolkit.

The first tool you need in order to trade profitably is your own personal investment education. It’s a good investment in your trading future to pay now for some good investment and trading education courses so you can establish a workable approach to trading in your particular market.

You will also require an excellent source of market information in order to invest or trade effectively. If you are day trading, you need real-time charts with price data and accompanying indicators so you can monitor the markets throughout the day and use them to make your trading decisions. If you are a longer term investor, you will probably still want a source of charts, but they do not necessarily have to update in real time since you will most likely be making your investment decisions outside normal market hours.

A good source of market fundamentals research is crucial for both fundamental and technical traders. It is a good idea to find an independent researcher to supply you with information who is not financially tied to promoting any particular company or industry.

With the right trading tools in your kit, you will be well on your way to trading profitably. Always be aware that trading involves the chance of loss and there are no assurances that any trading approach will always be a winner. Manage your risk wisely, trade judiciously, and you can reach your goals.


Your best investment is education. It is wiser and cheaper to spend a few hundred, or better, a few thousand dollars on good books and seminars than lose the same dollars on a bad trade. Allow us with the Trading Plan Review to help you get your library of knowledge started.

Remember, knowledge with action is power!

Massive action is even more powerful!

Why Have a Trading Plan?

why have a trading plan

Why Have a Trading Plan?


The reason people are encouraged to have a trading plan is so that they have an increased chance of making money out of trading. Purely acting on uninformed hunches and what the taxi driver suggested may work occasionally, but in the long term this approach will send
you broke.

Trading can be exciting. It can be fun. It can also be very stressful. A Trading Plan, well written and strictly followed, will possibly make trading a little less exciting, a lot more structured and will reduce stress.

If these considerations are important to you, then read on.

The one aspect that separates amateurs and professionals in any field of endeavor is that professionals, especially successful ones, always have a process which they strictly follow.

Before you leap into the arena of trading, let’s just spend a moment on considering some of the harsh realities.

Chilling Facts

Most private traders lose money trading the financial markets, especially futures. Discovering why could be your first step to trading success.

A recent survey showed that more that 70% of active traders do not have a detailed, written trading plan encompassing:

  • Market analysis
  • Entry methods
  • Exit methods
  • Money management
  • Progressive financial situation review

This means most market participants can’t, or simply don’t, make disciplined trading decisions to take advantage of various market opportunities as they appear.
The survey also showed that those without a plan generally suffered from

  • Overtrading
  • Trades becoming ‘investments’
  • Gambling on hunches
  • Not making their own decisions
  • Not taking responsibility for their actions

Maybe you recognize yourself in this list?
If you know that your approach to trading has room for improvement, then we can help. If you don’t have a formalized, written trading plan, with an edge, then I know we have something to offer.

Trading for living :How much capital is enough?

How much trading capital you need to do trading for Living.

A simple answer is the more, the better. Under capitalization is one of the major problems that traders have.  First of all,  trading is one of the most difficult professions on the earth due to its very high earning potentials. If you have a few thousands trying to make a living at it, then what I can tell you is that it is impossible. You need at least 7-8 Lakh (100K $ approx.), to even stand a chance to make a modest living if (a big if) you have the skills.

trading for living
Trading for living

For example, your objective is to make 3-4 Lakh per year consistently, which is 50% of your 7-8 Lakh. A 50% annual return year over year WITHOUT compounding is very hard to achieve even for the most experienced traders. With compounding, not even Warren Buffet could. I believe Warren Buffets track record is perhaps around 15%-20% minus management fees with compounding. The Madoff’s track record was around 10% compounding. You know why I mentioned Madoff here.  Stay away from anyone who claims something like that.

Continue reading “Trading for living :How much capital is enough?”

Trade like a hunter and make a killing in stock markets

Trade like a hunter

 trade like a hunter
Trade like a hunter! Sometimes you can find inspiration from where you can never expect from.
There is a lot we can learn from some of the hunters – gatherers still thriving in the forests all around the globe. These people make their living off the jungle and they have no contact with the outside world. The Majority of the traders loves to trade alone. Traders follow their own unique style and every trader is different all over the world.
There are a number of animal species in their jungle, but they don’t waste their energy running around after each and everything they see, but they have a limited list of say 5 to 10 things on their menu and over the generations, they have perfected hunting into a kind science.Traders also cannot trade in each and every stock out there. Traders, understand and follow few stocks. They get used to volatility, the price action of those few stocks.

Continue reading “Trade like a hunter and make a killing in stock markets”

10 Ways to Lose money

10 Sure shot ways to lose your capital in the markets


1. Holding an under-diversified portfolio overnight.
Traders generally tend to sell their winning investments while keeping
Holding on to their losing trades.
This behavior is known generally as DISPOSITION EFFECT.

2. Trading a new strategy with real money before first practicing it.
Traders get excited and amazed by the idea of making fast money.
In turn losing their capital in hurry of making quick bucks.

3. Expecting too much too soon.
Traders generally come with a wrong mindset into trading.
They think of the market as a short-term gain machine or where they can make a fortune overnight. Trading needs patience. Continue reading “10 Ways to Lose money”

3 Ways to approach Technical analysis

3 Ways to approach Technical analysis

So, You heard of Technical Analysis. But do you know about Ways to approach Technical analysis? The extent of studies and approaches are becoming more vivid and widespread because of the continuous evolution of breed of traders. There are classical two systems to trading, (as most of you will be familiar with).
I. Technical Analysis                    &                          II. Fundamental Analysis.


Today, we are going to talk about Technical Analysis approach. Popular ways to approach Technical Analysis are as follows:

1. Chart Analysis
2. Pattern Recognition
3. Trend and Momentum Analysis Continue reading “3 Ways to approach Technical analysis”

Let Profits grow

Let Profits grow

So much importance given to novice traders, these days stresses discipline. This is guaranteed that discipline will dictate our long-term success or lack of discipline will determine your short term failure when it comes to trading. There is the discipline to admit when one is wrong in a trade and take the corresponding action to close the position. There should be discipline to cut losses quickly. As well, one discipline should keep them from averaging down on positions when this is not one’s original game-plan. One discipline that fails to receive the same level of commentary as the ones we have mentioned; is the discipline to stay in a trade that is going ones way.

This is actually more of a difficult situation to quantify and more of a skill that takes the time to feel confident with. It sometimes involves years of trading and exposure to the markets to get that true feel. The common phrase is referred to as “ Letting One’s Profits grow.

Many new traders fail to feel confident enough in their trading ability and have yet to develop the patience that is needed to stay with trades and as a result are too quick to exit a position that still has profit potential. We will try to address this phenomenon and share some ideas and ways of perhaps picking ones exit points better when in profitable trades or at least present some ways of staying in profitable trades a bit longer. We all know the feeling of exiting a position and then instantly realizing we have exited too early as the stock continues its profitable path but we are no longer on board.

Some in the industry comment that as a trader you shouldn’t beat yourself up when you make money even though you have left money on the table. There is some truth to this as an inexperienced young trader, but as a trader matures one needs to be able to press or be aggressive with their trading when they are in the zone and capitalize on those occasions and times when things are going right. When looking at the absolute numbers, historical studies have shown that most traders are wrong more times than they are right.

Trading, however, is not about always being right it is about making money and preserving capital for the times when one is right. Remember, many professional traders are only right about 30% of their trades, but these trades are leveraged or squeezed to their full potential enough so to more than offset their more frequent manageable losses. So let’s move on to discuss the thought patterns and actions that can be used to aid us in staying with trades and becoming better traders. One relatively simple concept that we have talked about in the past in light of other trading strategies but one that applies here as well is that of scaling out of a position that is in one’s favor.

When being long 1000 shares we might sell 500 first and then sell the second 500 later. It is difficult to quantify, but ask any trader who has been around a while and they will tell you that often it’s not until they sell a position that they then realize it is going higher. The act of offering stock and seeing how long the order stays live as well as how the shares are filled tells one about how the stock is acting. For this somewhat mysterious reason, one can often be able to assess their position more objectively if they lighten up on their overall position by selling 50% or 30% or some initial percentage one as a trader is comfortable with.

Furthermore, it hopefully will by one a bit more time to see how other market forces are reacting and help to confirm exiting the position entirely or a least mentally adjusting ones stop price. Remember as well that as a trader, one should try to avoid using the price level of a stock as the sole determinant of when a position should be covered.

This is one element to the puzzle but one really needs to look at how a stock is acting. Traders like to buy stocks that are acting well and sell stocks that are acting poorly regardless of price level. The stock that you are long at 80 and is quickly trading at 81 may be going to 85, no one knows. One needs to compare the conditions surrounding the stock at 81 as they compared the stock at 80 when they initially got into the trade. If the conditions are relatively the same one may try to stay with the trade until they see a condition change.

Another Approach is for a trader to try to step outside themselves and their position and imagine they do not have a position on. From here the trader may ask, “ Would I go long from here?” “Is there a good risk reward scenario to be played at this point in time as if the past did not happen?” Realize that this thought process can be difficult for new traders and it is difficult for all traders to continually step outside themselves and to mentally assess a somewhat hypothetical situation.

Taking this a step further, however, one needs to realize that there is always a contra party to every trade and one should try to step into the shoes of the trader who potentially will be on the other side of the trade and look at the motivations and risk-reward equation that the contra side may be pieced together. For example, if one is long stock at 81 and the market is trading at 81 ¾ try to put yourself in the shoes of the trader who might be looking to short at 81 ¾. Does this trader have an upside stop loss point that they may be leaning on? Is there a technical level that the other side of the trade may be looking to get short against?

Can the other trader build a scenario of limited risk with greater reward? If your own answer is no or not very well then you may want to give the trade a bit more room to go. Perhaps one of the most critical elements that need to be in place before a trade is going to be able to let their profits grow is a traders confidence in themselves that they can set an exit point and stick to it. If a trader consistently finds himself “in the money “ on trades only to have trades come back through their initial entry point and then winds up losing money this can be extremely detrimental towards a traders ability to stay profitable Trades.

A trader becomes increasingly trigger happy at the slightest retracement of a winning trade because they mentally envision the potential for a losing trade before it even becomes one. When a trader trusts that he can exit a trade at his predetermined level, he can better focus on the trades that are happening in his favor. He can more objectively assess the “now” of the trade instead of addressing the “now” and the “later” of the trade at the same time. Finally letting profits grow involves patience. Patience comes through being around the markets consistently and realizing that there will always be another trade.

Good traders let their trades play out and they are not second-guessing lost opportunities that they think are happening around them. Good traders become comfortable letting trades go by when they cannot build a trade scenario they are used to. One must learn from their mistakes and not regret what has happened in the past, but always be looking to the future. Hopefully, this discussion has provoked some to see their trading in a slightly different light or has opened up for some avenues to explore their trading in a more constructive way.

Thank you and let your profits grow.