The art of Trading – The Elements of Survival

Posted by Mark Leibovit - VR Trader

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Surviving the “learning curve” to eventually profit in the market is the most difficult thing that many of us will ever do. Here are some tried and tested elements for successful trading that should help you through the process: The first fundamental is; “Know thyself!” Think about the outcome that you expect from your trading activities and your portfolio. Are you normally a conservative person or do you feel comfortable traveling at warp speed? How will your type of trading affect you emotionally? Can you handle the volatility of day trading or are you happier with long-term, conservative plays. Once you determine your risk/reward attitude, you can construct your positions and plays accordingly.

Next, you must understand (completely!) any strategy that you are using and what your specific goals are for that particular trade. You can’t make good decisions without knowing the mechanics of a specific technique. Don’t use complex or advanced methods simply because they are intriguing. The BEST strategy is the simplest one that accomplishes your goals! Once you have a candidate in mind, do your homework! Know the company and the calendar (any upcoming events, earnings dates, scheduled announcements etc).

When you have a good knowledge of a stock and its industry, you are way ahead of the investor that buys and sells on rumors or tips. Remember, “knowledge is power!” and with the tools on the Internet, there’s just no excuse for not being well informed about any company or industry group. When you are ready to trade, use simple proven techniques! One of the oldest phrases is; “Buy on down days, Sell on up days” and it is really not that difficult. Successful traders develop target prices for all potential plays and they know their exits before going in. They take the human factor out of trading by using STOPS and GTC orders. When news or events change the character of the play, they make the necessary adjustments. Learn to trade on YOUR terms, not the markets’!

After you take a position in a particular issue, stay informed by monitoring all the news and announcements affecting your play. This is one of the easiest rules to follow with all of the online information now available. Determining when to exit a play is a matter of personal preference and YOU are the only one who can decide how you will trade. Most professional traders are happy with consistent monthly returns of 5%-10%.

The most painful lesson comes when you close a losing trade. It’s very difficult to learn to close out losing plays early but the simple fact is; There is no reason to hang on to a losing position when there are so many other profitable plays that deserve your time and money. Accept your losses, learn from your mistakes (and evaluate each one critically) then move on! Success will come when you create a favorable balance between hard work and patience. Too many traders give up after a few losing plays, long before they have time to learn (and absorb!) the various methods required for profitable trading.

As your portfolio increases, diversify! There is always something to be said for becoming an expert on a few specific issues but don’t confuse the basic ideas. By spreading out across industries (and instruments), you can avoid the agony of violent swings in a particular stock or sector and limit losses when the unexpected occurs. Just remember the Titanic…

Letter from Michael Campbell HERE.

Marks VRTrader Silver Newletter covers Stock, TSE Stocks, Bonds, Gold, Base Metals, Uranium, Oil and the US Dollar.

Mark was named the #1 Gold Timer for the one-year period ending March 25, 2008 by TIMER DIGEST.

More kudos – Mark Leibovit was named the #1 Intermediate Market Timer for the 10 year period ending in 2007; the #1 Intermediate Market Timer for the 3 year period ending in 2007; the #1 Intermediate Market Timer for the 8 year period ending in 2007; and the #8 Intermediate Market Timer for the 5 year period ending in 2007. NO OTHER ANALYST SURVEYED APPEARED IN ALL FOUR CATEGORIES FOR INTERMEDIATE MARKET TIMING AS PUBLISHED IN TIMER DIGEST JANUARY 28, 2008!
For a trial Subscription of The VR Silver Newsletter covering Stocks, Bonds, Gold, US Dollar, Oil CLICK HERE

The VR Gold Letter is available to Platinum subscribers for only an additional $20 per month, while for Silver subscribers the price is only an additional $70.00 per month. Prices are going up very shortl, so act now! Separately, the VR Gold Letter retails for $1500 a year! The VR Gold Letter is published WEEKLY. It is 10 to 16 pages jam-packed with commentary and charts. Please call or email us right away. Tel: 928-282-1275. Email: mark.vrtrader@gmail.com .

awards

Marks VRTrader Silver Newletter covers Stock, TSE Stocks, Bonds, Gold, Base Metals, Uranium, Oil and the US Dollar.

Mark was named the #1 Gold Timer for the one-year period ending March 25, 2008 by TIMER DIGEST.

More kudos – Mark Leibovit was named the #1 Intermediate Market Timer for the 10 year period ending in 2007; the #1 Intermediate Market Timer for the 3 year period ending in 2007; the #1 Intermediate Market Timer for the 8 year period ending in 2007; and the #8 Intermediate Market Timer for the 5 year period ending in 2007. NO OTHER ANALYST SURVEYED APPEARED IN ALL FOUR CATEGORIES FOR INTERMEDIATE MARKET TIMING AS PUBLISHED IN TIMER DIGEST JANUARY 28, 2008!
For a trial Subscription of The VR Silver Newsletter covering Stocks, Bonds, Gold, US Dollar, Oil CLICK HERE