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We are standing on the threshold of another new year. Buy and hold style of stock investing may be dead. To invest successfully in today's markets, you need to have a trading plan. You should start your 2010 with a trading plan that can give you 7 figures.
What you need is a new trading plan for 2010! Call it Trading Plan 2010. What worked in 2009, may not work in 2010. You need to take a fresh look at your performance in 2009. Start the new trading plan by taking a fresh look at what type of an investor or for that matter trader you really are. Try to introspect and ask what type of an investor you are. Are you an investor or a trader? Are you a long term investor that believes in buy and hold or you are a short term investor who wants to make a quick killing in the market. Ask these questions seriously. Determine the best investment time horizon that has worked for you in the past and you believe will work in the future.
Start writing your trading plan. Take out a piece of paper and pencil and start writing step by step what are your goals for 2010. Start by making a clear financial goal for yourself. Do you want a 7 figure in 2010. Be clear! What are the financial resources at your disposal. Be realistic! What type of trading strategies are best suited to help you achieve your financial goals in 2010. Down down the details in a neat and clear format. Ponder over them, rethink and start again. This trading plan should be your blueprint of success in 2010!
Make an important resolution in the trading plan that you will become an independent trader in 2010. This means that you will make your independent judgement about what stocks to invest in. You are not going to watch CNBC or Bloomberg and buy on someone's recommendation. Well, you will hear what others say but you will make your own judgement. You will learn those chart patterns that can help you in judging what is the best time to enter the market and what is the best time to get out of the market. Your motto should be you will only trade when you are dead sure that you are about to make a winning trade. No more confused and half hearted trades. You are going to stay out of the market if you are not sure!
You need to make it clear to yourself that you are not trading the stock market, you are only trading the stocks. This means that the market sentiment is irrelevant to you. Once you have identified a stock, think what will be the best strategy. Should you go long, for how long? Should you go short and for how long? Make a trading plan that does not depend on the market direction. This trading plan should work for both the bulls and the bears.
The last and the most important resolution that you should make for 2010 is that you will never trade without first putting the stops. You will only buy at the support or within 5-10% of the support and sell at the resistance or within 5-10% of the resistance. You will learn those chart patterns that can tell with deadly accuracy when the market is at it's lowest and your downside risk is minimal.
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Source by Ahmad A Hassam
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