10 Best Stock Trading Tips

Below are some of the best stock trading tips I have learned while online stock trading or from other people who trade.  They are listed in no specific order but are very important to anyone who wants to profit from trading.

1. Always trade with the trend of the market and the stock you are interested in based on the time frame you trade.  For example if you are a swing trader use a 3 month chart to find the current trend.  If you are day trading 5 minute charts use 30 min or 60 min charts to determine the trend.   If your not sure draw trend lines from the lows on the charts or the highs on the charts from left to right – if it slopes up you are in an uptrend if it slopes down you are in a down trend.
2. Know your stop loss points or your Uncle point, or your max pain point or how much you are willing to lose on a specific trade before you take any step to enter a position.
3. Always obey your Uncle point / Max pain price.  Do not under any conditions move your stop lower.  You placed your stop originally with a certain factor in mind so keep that stop there and take your loss.  You don’t want your loss to turn into a much larger loss by not following your rules.
4. Do not add to a losing position.  The stock is going against you for a reason no matter what it is.  Accept the fact you were wrong at this particular point in time.  You can always take a new position again when your rules tell you its ok to.
5. Come up with a set of rules to live by.  No matter what you trade or  how you trade you need a set of rules to judge your results by.  Its ok to change your rules or tweak your rules but you have to have something to base those changes off of.
6. Take the rules you have and make a trading plan.  Use if / than statements like a mathmatical equation.  For example if the stock breaks above a certain point then I will buy x amount of shares and I will risk x amount of money or points.  This helps take emotion away from the trade you are taking and makes you take a systematic aproach to your trades rather than an emotional approach.
7. In your trading plan identify exactly what pattern you want to trade.  Do you want to trade break outs / break downs, pull backs to support, pennant patterns, wedge patterns ?  You need to have this all written into your trading plan.  And one tip is if you are just starting out stick to one pattern until you have mastered it and then once you have mastered it then and only then should you move to another pattern.
8. Don’t trade based on what you are watching on CNBC, in fact try to avoid watching the talking heads they will only confuse you.  Trade based on your rules
9. Trade what is actually happening in the markets on that particular day, don’t trade based on what you think should be happening.  If the market has been running up for a few days and the market opens up trade to the long side – don’t trade thinking the market is due for a roll over or rest.
10. Do not try to pick markets highs and lows.  This is a losing game.  The people who claim they picked the tops or bottoms just got lucky if they are actually telling the truth.  Just focus on trying to take gains out of a portion of the move.

These are  the 10 best stock trading tips I use each and every day when trading the market.  Good luck and follow the rules.  It is ok if your internet share trading / online trading is boring.  As long as you are being profitable right?