How to End Stock Picking FrustrationMay 21st, 2014 | By smbcapital | Category: Dna Program, Trader Development, Trading Lesson
Even the best traders have their bad days (or weeks or months). Sometimes the frustration can be maddening. It’s not a question of talent – as previous trading success bears this out. It’s just that sometimes, things just stop working and you need some fresh ideas – and when you go to the well, it comes up dry.
Successful traders continue trading as they know there will be better trades ahead.
How do they ‘know?” They know this because their process and preparation is something they take pride in and is something they can always fall back on.
Why Stock Selection Is the Key to Your Trading Success
Plan the trade. Trade the plan. It’s a little hackneyed and cliched, but it works. Being in the right stocks is an integral part of your trading success as these opportunities tend to offer the best risk to reward.
Experienced traders understand that while some technical setups appear similar, they may not always trade in the the same way. One man’s breakout trade can be another’s fade. Understanding the true catalysts behind the move is essential to successful trading.
We focus on Stocks In Play. These are the stocks that are most likely to offer the best risk to reward and the greatest opportunity to make consistent gains. Trading goes beyond mere chart reading . . . you need to recognize and understand the meaning and significance behind the patterns.
How to Build Arguments for a Stock In Play
Buying or selling a stock in play should be the culmination of a well thought out plan, made easier through a thoroughly practiced regimen, and the result of a deliberative process.
Visualize each trade with an eye to the Big Picture of the market . . . then drill down into the subtlety, nuance and minutiae of the trade.
Dig deep and try to find as many reasons as possible as to why a stock should act in a certain way. Attack and question your premises. Defend your argument. Thoroughly test each trading hypotheses as if your (financial) life depended on the outcome of the trades (over time, they might). Go beyond surface proof. Momentum from the last half hour or a moving average cross-over is not nearly enough to go on.
Every day I prepare for Stocks In Play. This process allows me to have an edge with my favorite setups. Does yours? (or do you even have a process?) We can help – please let us show you how.
On May 28th, SMBU will be presenting a new webinar titled “Why Some Traders Almost Always Make Money.” It should be very informative and productive. We encourage you to join us by registering HERE. (Seating is limited and available on a first come, first serve basis)
We look forward to seeing you there – and thanks.
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