Successful Stock Trader A Difficult Yet Lucrative Endeavor

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To be a successful stock trader, one must have patience, timing and money. Similar to gambling, there is plenty of action anyone with a brokerage account can try their luck and either recognize quick profits or painful losses. Trading can be a hurtful and short lived proposition unless one has trading discipline. Here are some valuable and informative tips and advice on how to survive and therefore succeed in today's financial markets.

Being a successful stock trader means committing more time and being more dedicated than being an investor. That's because trading is a profession that employees thousands of market wizards and competition among them is fierce. But there are successful amateur participants in the stock market, and many of them owe their successes to an ability to formulate trading rules and adhere to them, and to being prepared for losses even when those rules are followed carefully.

For many the experience of losing money when the goal was obviously to make a profit can be so unnerving that it causes trading discipline to break down rapidly, decisions to turn irrational, and losses to grow as the trader chases after them. Fear, hope and greed are vices that, as one of the most spectacular traders of the 20th century once wrote, are best avoided by any trader and especially the amateur.

Weather a profit can be earned from a trade usually comes down to timing, that is especially relevant in the world of day trading, when short term gains are viewed as more important. Since the majority of trades are for "fast money," patience becomes important when the trade becomes an true investment. A trader should avoid over trading, because this will often lead to an investor forgetting her own predefined rules.

The good news is that timing a stock, like timing the markets, is a skill that comes with experience. Paying attention to trading volume and price movements will, over time, teach one to read the signals, spot the trend, and time the trade. With patience and timing, the cost of tuition for a new trader can grow to a substantial sum.

Finally a successful stock trader needs enough capital to be independent - essentially self-employed. Among the logistical concerns, the issue of funding is perhaps the greatest because it sets the tone and possibly even the outcome of the trading venture. At a minimum one must have enough capital to absorb trading losses. But personal and family considerations often take an unforeseen toll. Bills and mortgage payments must never become dependent on the outcome of a trade.