Friday, January 25, 2008

Making money the right way, Mr Trader?

Making money the right way, Mr Trader?

While the caption of this piece may come across a lecture on morality, remain assured, it is not so! The object of this article is to make you a better trader and help you form "profitable trading habits" that will work with you during bull and bear markets. A few are techniques in financial management and some are out and out mind over matter points.

It is said that the first impression is the lasting one; the same goes for stock market trading. Our first experience invariably determines our attitude and aptitude for trading in our later years. Behavourial scientists concur that traders tend to get comfortable with any technique that makes them money, not caring to probe whether the same is an "all weather" system or just beginners luck!

So, many a trader tries an amateurish black box, and if (un) fortunately, he makes money, winds up incorporating it as a core "system". Many loss making trades later, the same system is discarded as useless junk that it actually was. Before you experiment with any such fallacy and form it into a loss making habit, read on….

Trodding the beaten path
For most beginner level traders, it takes months if not years to get a hang of interpreting and thereby profiting from market signals. At such a formative stage in ones trading career, it would be a folly to tweak around with systems created by veterans.

Most beginners get enamoured by the exotic oscillators and invariably wind up creating basic systems that trigger buys/ sells based on an oscillator turning upwards/ downwards.

Compared to the price chart (which looks simple like curry and rice), oscillators tend to look like exotic Italian fare. The infatuation with oscillators is therefore natural. But what is quickly forgotten is that oscillators are derived from the prices themselves and cannot be used to forecast the parent. Can you wag a tail to shake the dog?

Source: Internet

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Disclaimer

Disclaimer : All information given here is for information purpose only. Users are advised to rely on their own judgement or investment advisor when making investment decisions. This blog is not liable and take no responsibility for any loss or profit arising out of such decisions being made by anyone acting on such advice.

Disclaimer && Decalration

This blog is formed for sharing useful information from financial world. This blog aims to increase the awareness among the people so that they are well informed .The blog also shares some details for investor, trader ,newbie friends in stock market on free buy/sell/hold recommendations. Here the recommendations are shared along with information on Stock Splits, Right Issues, Bonus Issues, Latest Stock market updates. This publication is not, and should not be construed to be, an offer to sell or a solicitation of an offer to buy any security. This publication, its publisher, and its editor do not purport to provide a complete analysis of any company's financial position. The publisher and editor are not, and do not purport to be, registered investment advisors. Any investment should be made only after consulting a professional investment advisor and only after reviewing the financial statements and other pertinent corporate information about the company. Investing in securities is speculative and carries a high degree of risk. Past performance does not guarantee future results. This publication is based exclusively on information generally available to the public and does not contain any material, non-public information. The information on which it is based is believed to be reliable. Nevertheless, the publisher cannot guarantee the accuracy or completeness of the information. This publication contains forward-looking statements, including statements regarding expected continual growth of the featured company and/or industry. The publisher notes that statements contained herein that look forward in time, which include everything other than historical information, involve risks and uncertainties that may affect the company's actual results of operations. Factors that could cause actual results to differ include the size and growth of the market for the company's products and services, the company's ability to fund its capital requirements in the near term and long term, pricing pressures, etc.

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