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- Jesus answered, "The scripture says 'Man shall not live by bread alone, but by every word that proceeds from the mouth of God'."

4 Jul 2018

STOCK MARKET-- What are the hidden secrets of the stock market?/Go through it--

At the times I’ve done well in the markets , it was usually because i did certain things in a certain way. When i haven’t done well it was usually because i didn’t do these things.
The secrets presented below are from my experience and also from my mentors and from reading the masters especially Jesse Liver more and William Gann , Benjamin Graham . Actually i have learned more from their failures then their triumphs. The same mistakes made 100 years ago continue to be made every day. Technology may change, but human nature never does. There is a world of wisdom presented below. You may not use all of the secrets, but even if you apply some of them , there is no doubt in my mind that you will become successful.
1- Never let a good profit turn into loss.

This trading sin has ruined many hopes. If you have a decent profit in any position and you are absolutely sure it is going to grow larger, at least place a stop where in the worst case you’ll break even. If the market is good the stop won’t be hit and if the market continue to move in your favour, keep moving the stop to lock in at least some profit.
2- When in doubt , get out.
An old timer once said “I am prudent enough not to stand in the middle of the railroad tracks while i try to decide if the headlight i think i see is a train or an illusion.” . If it’s not acting right according to your plan , get out. If the market has not started to move in your favour within a reasonable amount of time , get out. Your judgement will deteriorate the longer you hang onto a losing position and you might end up doing the wrong things.
3- Spread your risk through diversification.
Distribute your risk among a variety of trades and markets. Divide your capital and never risk more than 10 percent on any one trade. One good profit will usually totally erase four or five small losses but if you take big losses and small profits you will have no chance of success. Concentrate on active and liquid markets, the ones which allow you to enter and exit when you want with minimum slippage.
4- Never average a loss.
Look at it this way: if you make a trade and it starts going against you , then you’re wrong at least temporarily. When it’s getting worse day by day why do your best to potentially compound the problem? Stop the loss before it is eternally too large and don’t make it worse.
5- Guts are as important as patience and more important than money.
Some traders are too bold and as a result over trade. However some have trouble in pulling the triggers. This is a weakness which must be corrected. You must train yourself to trade so that there is no hope and no fear. When you enter or exit a position do it decisively and without emotion.
6- Be sceptical.
To be successful , a trader needs to be a student of human nature and do the opposite of the general public. Sell on your first clue of weakness and don’t wait until everyone is bailing out. Remember the market doesn’t beat you , you beat yourself. Be wary of tips , following tips and not the market is just another sign of human weakness.
7- Watch the reaction to news.
It’s not the news but how the market responds to news is important . It’s news that sets the public perception. If the market doesn’t reacts too much to good news , it’s probably been discounted.
8- Be aggressive.
Be aggressive when taking profits or cutting losses if there is a good reason to do so. Good traders act without any hesitation.
9- Have no regrets.
When you liquidate a trade based on sound reasoning , never regret your decision. if it was a mistake just learn from it. All of us make mistakes.
10- Have patience.
Gann once said “People are in too big a hurry to get rich and as a result they go broke”. Don’t try to get rich in a few months. Don’t try to catch all the fluctuations.
11- Have a plan before you trade, and then work it.
If you have a plan and follow it, you avoid emotionalism which is the major enemy of the trader. You have to remain calm and focused. To do this you have to be totally organized. So have a plan before you trade.
12- The trend is your friend.
For me this is the most important. The best way to make big money is to determine the major trend and then follow it. If the market does not go your way , you must go it’s way. Jesse Liver more said, it is safer to sell when the market is down 50 points then when it is down just 10 points. The reason is , at down 50 all support is gone and those who bought the breaks have lost all hope, are demoralized , and in a leveraged market are at the point where they must all try to exit the same small door at the same time. The result at times can be avalanche.
I feel if you could avoid three weaknesses - overtrading, failing to place a stop loss and averaging a loss you will be successful.

1 comment:

  1. Thanks in support of sharing such a nice opinion, paragraph is nice, thats why i have read it completely