Learn to Trade 


The only way to learn to trade is by doing. Imaginary "paper trading" won't cut it.

There is nothing like having real money on the line to test ones' psychological reactions to fear and greed.

Learn to Trade is really about timing. Buying and holding a position over a period of years proves nothing. How one reacts in every sort of market is key.

Set up an "experience" fund consisting of 10% of your available risk capital but not more than $5,000 maximum.

Force yourself to trade in only one issue at a time; long or short. You can trade 100 shares of an average-priced stock, 50 shares of a high-priced stock, or 200 shares of a low-priced stock but only one issue at a time.

If a second issue looks attractive, force yourself to choose which one to go with.

Your goal is to always be long or short the most suitable stock at the moment. If you can't find one, stay in cash until one shows up.

Look only for situations that look to yield potentially large gains. You won't always hit "home runs" every time, but a lot of "singles" or "doubles" isn't bad either.

Your goal should be to always show an "absolute" net trading profit each and every month. You're not interested in performing "relatively" well compared to some market average.

There is only one trading rule that is always correct: Losses must always be "cut"!

They must be cut quickly, long before they become of any financial consequence.

It is impossible, in my opinion, to rack up an accumulation of net trading profits over a large number of trades, that includes both profits and losses, without being "good".

Learn to trade well enough and you just might be able to quit you're day job.

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