Psychology

Setting your expectations is one of the most important part in trading. Having low expectations is not exactly a bad thing especially if your preparing yourself for the stock market. All traders know that money will be inevitably lost so its not always good to have high expectations unless they are realistic. The stock market is unpredictable, so as a beginner its always better to start small with a capital that is manageable.

Experience is the best teacher but having a degree can be useful, especially if you want to work in a financial company. This way you don't have to dive in with your eyes closed. Education and internship are great tools to train you in the business world.

Every trade starts with a stock. But with a multitude of stocks in the market, which one do you choose and how do you decide? more importantly, what's the right signal to buy a stock?

Assumptions

Before your carve out your golden rules, you have to ask yourself a couple of questions first. Your criteria will depend on your needs and expectations.

• Are you a trader or investor?
• How long are you willing to trade?
• Do you tackle risks head on or avoid it?
• Are you after dividend payouts or stock growth?

Anyone who has watched the film Wall Street knows how exciting and lucrative the business world can be. With the technology we have today, a regular John Doe can become the next millionaire with the right moves. Unfortunately like the movie, the stock market is a cut throat world where hard earned savings crash and burn.

Decide your Future

People use fundamental analysis and technical analysis to make investment and trading decisions. But there are a certain group of people who believe in using astrology for share trading. One website claims: "[Service]... offers a unique educational experience for traders wishing to decipher the esoteric mysteries veiled within the teachings of legendary trader W.D. Gann." You've probably heard of, William Delbert Gann who created the technical analysis tool known as Gann angles. Gann market forecasting methods are based on geometry, astrology, and ancient mathematics.

Stock market traders are of two kinds; those who go for the small boards and those who trade big boards. What I mean for small boards are those listed stocks in mines and other natural resource exploration, while those in trade big boards are the industrial and commercial sectors.

Is trading gambling? It’s a question that’s bound to pop in your mind if you’re an active trader in the markets. Trading seems like gambling. You risk a portion of your capital into this thing: this concept we call a market. You put in your money and your money can do one of three things: return you an increase in capital, return you the same amount or return you less. Very similar to putting in money into the slot machines and getting those returns isn’t it? So are traders gamblers or not? Let’s examine it.

Everyone wants to know the secret on how to do anything. What is the secret to success? In most pursuits it would be persistence and perseverance. And that is certainly true with trading the markets. Being persistent in your trading and persevering through the tough times will eventually lead you to trading success. But you're here to learn the real secret to successful trading. What's the secret? Is it the trading system? Is it the type of market? Forex, stocks, bonds, options, commodities, futures or mutual funds? Do you have the next hot tip?

Risk management is a critical part of a successful trading career. Your primary goal when daytrading or actively trading is to always protect your capital.

• Two Percent Trading Mechanics
• Two Percent or Die
• Two Percent Risk Management