Ten simple rules for online trading success ...
1) Choose Your Trading Style Carefully. Give
plenty of thought to what kind of online stock trading you want to do.
Would you prefer day trading, where you close out every trade at the end
of each day? How about short-term trading where you are in a position
several days at a time? Maybe you'd rather be a weekly trader or monthly
trader. Though you can always change your mind, it's wise to have a
clear idea of the style of stock trading you prefer BEFORE you start.
2) Match Your Trading Style To Your Lifestyle. Your
choice of trading style is especially important from a lifestyle
perspective. Day trading usually means you will be at your computer for
hours at a time. Longer term online stock trading doesn't require as
much attention. As a rule, the shorter the time frame the more intense
3) Select A Broker That Matches Your Trading Style. The
type of online stock trading you choose to do will determine the type of
broker to use. Day traders need high-speed direct access technology.
Short-term daily, weekly, and monthly traders can use less sophisticated
discount brokers. When it comes to broker fees and other costs, day
trading is the most expensive.
4) Use A Low-Risk High-Reward Trading Method. Stock
trading involves risk. Most people inflict serious damage to their
trading account before they learn how to win consistently. Though it may
not seem glamorous, risk management is essential for successful online
stock trading. The only way to get the reward is to control the risk.
5) Make Sure Your Trading Method Works in All Markets. The
stock market doesn't just go up. It goes down too - sometimes for months
or years. Use an online stock trading method that takes advantage of
both down-markets and up-markets.
6) Trade The Best Stocks. Superior
stock selection takes advanced skills and extensive research. Unless you
are extremely skilled with lots of spare time, it's usually best to seek
the advice of a professional. Avoid big brokerage firms and mutual
funds. Facts show that most of their trading "experts" end up losing
7) Know When To Sell Your Stocks. Everyone
focuses on what and when to buy stock, yet few ever consider the best
time to sell. Paper profits only become real money when you convert them
to cash. Don't let your stock gains disappear due to neglect. Plan
ahead. Before you get in, always know the specific conditions that will
signal when it's time to get out.
8) Check Your Winning Edge. A
"winning edge" consists of the favorable factors that set winners apart
from losers. You must have a reliable advantage to consistently make
money trading online. Ask yourself - "What factors give me an edge?" Be
specific. If you aren't sure, you probably don't have an edge. The only
way to know is to analyze your methods and measure your results.
9) Invest in a good online stock trading education. Surveys
show that 9 out of 10 investors believe their chances of winning are
"above average" yet more than 80% of them actually lose money. This is
simply because they don't have the specific information needed to win.
As we say at RightLine, "If you think education is expensive, try
10) Associate With Successful Online Stock Traders. Online
stock trading presents unique challenges. Unlike traditional stock
trading, there is no live broker to help you along the way. If chosen
carefully, experienced online traders can be among your best trading
resources. You may even wind up with a good friend!