Ingredients for Trading Success

Markets are ever shifting and dynamic. Price in markets is created by the market’s participants driven by greed, fear, hopes, opinions and prayers.  Prices on the chart are average of everyone’s opinion or feeling about a specific stock, currency or commodity.  Though no two individuals are alike, human beings tend to repeat their actions and are a creature of habit. This trend gets reflected also in market’s movements in the form of repetitive patterns and shapes within price information represented by charts. Therefore, it makes good sense to study the price action through usage of charts to decide current market trends and to predict future market trends. Profitable and reliable method for analyzing this market is technical study, i.e., analysis of rate charts. However, it’s important to know that technical study is not perfect.  Ability of any trader to expressively adjust to the changing market circumstances, alertness of cognitive bias and discipline are the keys to trading success. 

                

Easiest way to be successful is to watch people who are thriving and try to grow the attributes that make them succeed. Some of the major traits of successful investors I have observed in past few years are:-

Diary of Trading - Most successful investors note down the techniques employed to learn the trade, how the trade was done, what was the desired outcome and what the ultimate outcome was when trade was closed. The successful trades when visited again offer hints on things that are done right. I think that most helpful lessons in life come from failures, equally costly, but most helpful lessons that any trader can obtain from the markets are by visiting the ineffective trade that made loss. Revisiting the mistakes as well as pondering over the lessons learnt offers trader understanding and understanding of the pitfalls; therefore, enabling him to keep away from repeating same mistakes again.

Money Management and Risk Tolerance - Trading isn’t for somebody, who is risk reluctant or who hates to be proven wrong!  Most of the successful traders across the world go off beam in markets nearly half the time.  Successful traders know that key to win in stock trading is to drop less when wrong as well as make more when correct.  Great traders respect risks and manage it professionally.  Only small quantity of capital is on risk on each trade, generally 0.5 – 1 percent of trading funds.  Trade sizes are intentionally kept manageable, in order that result of one specific trade is not a big deal, let be it win, draw or lose! Traders, who stay in this game and make big gains in trading in the long-term, are those who understand significance of wealth in trading and protect their accounts zealously.  Also one among the key elements noted amongst the successful trader is that they trade with risks capital only, i.e., money they can easily afford to lose. Scared money will never win, thus if you’ve to meet every day expenses from trading capitals, I strongly recommend you to avoid trading as possibilities of success are extremely slim.

Psychologically Strong - Taking emotional roller coaster rides of every trade or every trading day is the recipe for physiological exhaustion and burnout.  Successful traders find that daily misses and hits are not vital as the standard over time. The savvy traders don’t go greedy when going is excellent and don’t get scared when going gets hard. Remaining objective as well as avoiding emotional response in trading market is vital to surviving in this game. Here, I will like to add one of my personal beliefs that meditation helps greatly in trading. Meditation can help to calm the mind, and calmer mind results in clarity of thoughts and clear thoughts makes the way to disciplined execution and objective plans.

                                            

Discipline and Business Plan - Trading is one among the toughest profession; winning investors have business plans for stock trading.  They have a set of guidelines and rules to help stay their ship sailing within the right track. Business plan in stocks trading would cover the time spend to evaluate markets and trading, strategies and techniques to focus on,  expenses involved, systems to use, maximum drawdown’s, maximum loss/trade, goals and objectives,  etc. The best traders keep visiting there business plan and change them ever necessary, improving that with every iteration.  Lastly, the most vital trait you will see in all flourishing traders is discipline. And without discipline no single trader could be capable, as knowing is not same as doing. Discipline makes traders competent.

If you’ve such traits, then you’ve the ingredients to be successful in trading already.  If not, then you can plan to cultivate such traits over time.

Key Tips on Selecting Best-performing Stocks for Long Term Investing

Investing is the practical use of your wealth to make more wealth or, to state it another way, it’s your wealth working for you.When long-term investing is concerned, many investors try to find the top stocks for their future. Investors need to use discipline, remain focused on the long-term goals, and understand general investment objectives to successfully invest for long time. Learn how to recognize the best-performing stocks to make better investing decisions for the long-term.

Dividend Constancy

Companies with financial stability and predictable earnings gain the capability to pay steady and strong dividends. The dividends that comes from retained or current earnings, represents the capability of a corporation to produce profits for its owners. Different investors vary in view on how many number of years the study should cover. While a few believe that five-year history offers enough information, other suggests that dividend study should cover around 10 years.

Earnings

The market moves in phases. At a point, it moves fast and earnings increase. At other points, the economy drags and earnings go down. Many investors decide whether a stock depicts an excellent long-term buy by the assessment of past earnings in addition to future projection. If a company offers a consistent record of rising earning, it typically gains attention from investors. If any company's earnings projections show strong stable growth, it warrants increased investors interest as well.

P/E Ratio Inspection

Investors make use of the price-earnings or P/E ratio, to determine whether or not a stock is under or overvalued. They calculate this ratio by dividing present price of the stock by the firm’s earnings per share. The companies with high P/E ratios get more investors interest in its stock at higher prices. In contrast, a high price-earnings ratio also recommends that the stock cost is very high and requires to be decreased. Some investors also believe that lower price-earnings ratio value indicate striking value in that stock. The right determination is dependent on the particular situation of that particular company and other critical factors.

Future Economic Conditions

The main stock market averages offer forward-looking economical indicators. A steady failing in Dow Jones Industry Average indicates that the financial system is slowing. Investing for long-term requires discipline and patience. Even when the stock markets perform badly, the investors must find excellent long-term stocks and investments for their future. By using such economic indicators and fundamental tools, you boost your ability to discover those hidden precious best stock and keep away from the potential evaluation traps.

Invest in “Best of Breeds”

Invest only in the companies that are “the best in breed.” It includes companies that tremendously have established brands or have really strong emerging brands. It is the key.

Keep in your mind that in a few sectors, the idea of “brand” means lesser than in other fields of the market. For example, branding means less in mining region than it is in retail. In general, it is most excellent to stick with ubiquitous, preeminent and highly-admired brand as well as underfed sectors where the stocks are difficult to locate or don’t exist. If investing in less “brands conscious” sectors, stick with “best in breeds” companies and chase the other elements of the strategy. The concept of brand being “moats” around business is something that Warren Buffett has spoken in-depth.

Invest in large-cap and mid-cap companies and avoid the small-cap names. It isn’t a law, as there are a few superb small companies that will fit into this framework of investing, but ensure that most of the picks obey this recommendation. Furthermore, if you’re investing in “the best of breeds” companies and most excellent brands, following this tip shouldn’t be a difficulty.

Moreover, if you have a look at the top performing stocks in past, all has one thing common – a wonderful brand. Besides the stocks mentioned above, consider a few other examples: Pepsi (NYSE: PEP), Nike (NYSE: NKE) and Google (NASDAQ: GOOG). While you may not have Buffett’s asset after investing in such stocks over the past five years, you likely have trounced the stock market easily.

Invest in Simple Business Model Companies

Invest in the best stock which offer a fairly straightforward, easy-to-understand company business model. The examples of this tip includes Starbucks (NYSE: SBUX), McDonald’s (NYSE: MCD) and Apple (NASDAQ: AAPL). If you come about to understand or have specific industry knowledge regarding a company, which other investors may find complicated, then those stocks also are worth a look just for your investing world.

How to look for the best stock investments?

Are you one among those individuals who totally dread the thoughts of investing in the stock market and consider this like a betting platform? If yes, it is then high time now that you reconsider your age old notion. Stock market’s trading can now prove to be an extremely rewarding experience, both monetarily and emotionally, provided you know to invest in the stocks. 

Knowing the complete stock market isn’t an easy task, as a lot of research is needed to get the most excellent idea of the whole market. You need to make a decision for the ultimate investments plan, in order that you don’t have to lose money. It also is important to recognize whether you really want to go for the online stock market or not. To know much more about the various concepts of the market, you need to ensure that you find a genuine and reliable website. This would certainly help you make the maximum profits and you will be glad to discover that your sincere efforts have become very successful in the stock market. If you wish to invest in stocks, then you also should ensure that you look into the stock charts since this would help you really to make the true income. Planning in the correct way in this stock market and buying the best stock only, can help you make the ultimate profits. You need to decide the kind of investment that will help you take good care of your budget and your requirements as well. When you are pretty confident of the stock market, you can then try to invest into it without any problems, but efforts need to be taken to recognize the risk levels in it.

This will help you get the best stock and that too even without any problems. If you think that the risks that are there in the stock market are extremely high for you to deal with, then you must not try investing in it. You need to find out how to obtain the share tips, in order that you get the best stocks from the stock market. Research for the paramount stocks take lots of time and therefore, you need to ensure that you use some of the time to understand this market well. If, in case, you think that there are a few doubts in your mind, then you must try to make all possible steps to get them cleared, since this is very essential for you to earn the best profits. To recognize all the vital concepts of the stock market, it is fairly important to come across the right website, in order to know about all the stocks present to get the utmost profit. You also should know that how the stock gurus can help you find the best stocks for investment.

How to get the best investment plan for you?

You need to try out your best to find out the best stocks from the market. You also can decide on the amount of wealth, you are ready to invest in stocks. And, if you are unsuccessful, to get the accurate income from your investments, then you don’t need to worry because it takes lots of time initially to get good profit. You need to find out how to get back the total amount of wealth invested in stocks, to obtain the best advantages. If you make any small mistake, then it can make you go ruined and bankrupt. As a result, the more amount of research you do, the more profits you can produce from the markets. You will be able to obtain the ultimate wealth from your profit in this market. Having an apparent concept of the various stocks will help you in regard to acquire the greatest profit possible from this market. You also can try to get a few good stocks by looking at the stock chart.

How to recognize the best stocks?

You should know how to recognize the top stocks from the stock market. If you’re not at all prepared to take any risk, then you should wait for the best time and also make the best probable research. You will be glad after you’re capable of getting the utmost amount of profits and you will be able to get some good confidence. If you’re not prepared to invest in market due to the existence of the risk in it, you should then never force yourself. You need to select the best stocks and shares for you by searching online, researching and talking to stock gurus.