What needs to be done to be a Stock Trader?
Being a stock trader takes a total mental commitment to the task. It becomes a complete way of life. You cannot be a part timer. You cannot work at a regular job and trade stocks successfully.
When you decide to make your living this way you must be willing to work 365 days a year, 7 days each week, 24 hours every day with no time off. I know.
How do I know? As a blogger for 7 years and a part-time stock trader, I can personally tell you there is no time off. Never. Almost every waking moment is given to thinking about your current positions. Where should I sell? Should I move my stop up a little more? There are 3 more trades I’d like to make, but I need to save some extra cash in case I need it for a margin call. It is hard to pass up a trade that looks as good as XYZ, but I have to maintain my trading discipline. And so much more.
These are just a few of the thoughts that run through your head. You are constantly being torn by the natural enemies of fear and greed, yet you must hold your equilibrium to try to make dispassionate decisions. The first law of trading is to protect your capital so that any single trade will not have you going home broke.
If you are working a regular job or you own a business, you cannot be a stock trader. One or the other or both of these pursuits will suffer. When I owned my advisory company I did not make one single trade for 2 years because I understood the commitment necessary to be a successful trader.
Why am I telling you all this? Because I don’t want you to lose your money in the market as so many people do and I especially don’t want you to think you can be a day trader. You can still make money in the market and beat 90% of the Dalal Street experts.
First, you must learn that you CAN time the market even though your broker and all those “experts” will tell you that you can’t. There are several good timing advisory services that you may subscribe to or you can develop your own method.
Second, don’t believe all that horse wash about research. That is Dalal Street smoke and mirrors. Don’t try to pick individual stocks. Stick to no-load mutual funds with a discount broker. Buy only the best performing funds during the past 6 and 12 months. When they quit being in the top 1%sell them and find new ones that are going up.
There isn’t enough space here to give you the details. I want you to realize that you can safely make plenty of money in the market without devoting 365/7/24.