Day Traders, Penny Stocks, Stock Options, Futures and Forex

Greed and fear are the major players in the stock market. These two emotions are the
driving force behind almost all market participants - Institutional mangers, stockbrokers,
Investors, traders and yourself.

You might be saying to yourself that greed and fear will never get in the way of my trading,
but believe it or not they will be. It is not something to be ashamed of. It is something you
have to admit to, come face to face with, If you are to become a successful stock trader or
investor.

What do greed and fear look like in the stock market trading arena?

You have been watching a particular stock for some time now. It has set up perfectly, so you pull the trigger. You bought it at the perfect price and now it is moving higher just as you thought it would.

Now greed steps up to the plate and says to you, this is going to be a rocket ship. So you buy some more shares. Or your stock moves a few points and goes passed the price that you decided to get out. Greed tells you this baby is going higher tomorrow so you hang on.

When stocks make strong moves to the upside greed from all the cumulative market participants joins the move.

Stock prices usually fall faster then they go up, and when this happens, fear now steps up to the plate.

Lets look at the example above, where your stock went through your get out price and you held on because greed was by your side. The next morning the stock price gaps down. Their is heavy selling all morning long. Greed is telling you to hang in there the price will come back. The price keeps going down, now you get a knot in your gut, and your knuckles are turning white. Fear is now by your side, but by now it is to late, your nice profit has turned into a loss.

Everyone goes through this until they have mastered the ugly faces of greed and fear. Master this and you are well on your way to becoming a successful stock trader.

I agree totally. The emotional aspect of trading is the most difficult to master. It is also what prevents people from cutting losses short and managing money appropriately.

__________________
Kidgas

i personally use a system that allows the greed and fear to be removed from the equation completely. Sounds complicated, but it really isnt.

using a predetermined stop just below a strong support level is one way to alleviate the fear of holding on to a losing position too long. this is probally the most common mistake made by new traders.

Greed can be circumvented by taking profits. selling half at a double completely eliminates all risk. for those of us not lucky enough to find one baggers or more, a more conservative approach is selling thirds at key resistance levels like Pivot Points or round numbers. When these portions are taken off, the stop should be moved up accordingly to the entry point to eliminate further risk, and lock in profits.

The second aspect of the greed equation is position size. We are all guilty of taking a huge position on something that seems like a sure thing. Trading isnt like Vegas guys! A draw-down of 25% or more would do psychological damage to anyone, and creates a prospect theory bias that may not be overcome. your account size and stop distance from your entry point (potential full loss), will determine your position size. also, a predetermined level of risk per trade should be used (2-5% of the account size) for the potential full loss. These three criterion will allow you to calculate your size to put on that will only, for example, have you draw-down 2% of your entire acocunt is things should go awry and you get stopped out.

Using these two tips will certainly help any trader beginner to pro. If anyone is unclear about how to do either of these please ask and i will explain the position size calculation. i had a hard time at first too.

Hey, i completely agree with you. Everyone has heard about greed and fear being the two primary driving forces behind investor decisions. And that is true because, while much has been written about markets being rational and investors making rational decisions based on earnings reports. Most retail investors lose money in the markets because they let fear and greed, their emotions, interfere with their trading success.

__________________
Stock Market Training | Stock Trading Software

Tht's my MO. I am in the red this year.

Sometimes I believ I need counceling. I repeatedly buy a stock, panic and sell at a bottom. I need some education.

The reports of the society making immeasurable gains in stocks markets have been delivered in newspapers around the world.So the first timer investors have been attracted to the stock market. Day trading is one of the organizations gaining in demand with investors. But this day trading has full of risks. However you can make immeasurable gains in day trading,you are also expected to expend huge money.On the other hand, if you want to do day trading the following tips and guidelines are here to make you succeed:

There is no hype in this headline. This is the absolute truth. The following 13 secrets generated 992 pips net profits for me in 15 trading days

Forex trading system is the integral part of the forex trading plan of any successful forex trader. Therefore, special care should be given to creating a sound, proven, stable trading system that can be used to earn a steady and substantial income while trading the currencies.

I want to use this write up to help you understand the very currencies and times as well as time frame you can apply the breakout strategy. Make yourself comfortable and do your best to apply this invaluable lesson