Three Requirements for Stock Trading Success
Trading Stocks is becoming an alternative career for many people. It offers a variety of opportunities and advantages that working for a corporation does not.1. How to trade stocks successfully requires:
Finding a stock that is poised to move up in price, but which also has what is called a “low risk entry.” What is meant by a “low risk entry” is how the price has moved in recent days. There are patterns in a stock chart that tell you, when a stock is ideal for buying with a low risk. Risk is calculated by the use of a Stop Loss, which protects your capital and profits should the Stock Market suddenly go down.
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Learning how to read stock charts correctly which will tell you the Market Participant Groups that are currently buying the stock, and this is critically important information.
The chart example below is showing what is called a “bottom” formation, or when a stock stops a Downtrend. This is when it begins a recovery returning to moving in an Uptrend, which is what traders want to trade for short-term profits.
This stock chart example also shows resistance, which is where the stock will either stop moving up and move sideways, or retrace which is a brief period of price moving down. Stock charts do not predict what a stock will do, however they are a necessary and highly useful tool when considering a stock to trade.
3. How to trade stocks successfully requires:
Learning to identify certain candlestick patterns which will indicate that the giant Buy Side Institutions using Dark Pools, are buying giant lots of the stock in an accumulation mode. They want to buy millions of shares of a stock to put into their portfolios, to create the Mutual Funds in which individuals invest.
However as an example, they cannot buy 10 million shares of a stock all at one time. So using Dark Pool alternative trading systems off the exchanges they buy the stock in increments over an extended period of time, and this creates a specific pattern on the stock chart.
When you see this pattern, it is time to buy the stock for a short-term trade because the Dark Pool buying creates an underlying energy. The Institutions are pulling so much liquidity aka stock from the market that it alerts Professional Traders and High Frequency Trading firms, which quickly move the stock up in a fast momentum run.
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Summary
When you understand how to calculate the best entry for the lowest risk, know why certain patterns form, and who is controlling price then trading becomes easy and fun.
Learning how to trade the Stock Market does require a solid Stock Market Education. If you want to be trading quickly for extra income or as a career, then you need to take a Stock Trading Course.
There is a lot to learn but it fascinating, inspiring, and amazing. Learn how to trade stocks successfully by taking a course in Stock Market Education, and you will be opening a door to a whole world that you had no idea existed and get started in the right direction.
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Trade
Wisely,
Martha
Stokes CMT
TechniTrader technical analysis using a TC2000 chart, courtesy of Worden Bros.
Chartered Market Technician
Instructor & Developer of TechniTrader Stock and Option Courses
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Disclaimer: All statements are the opinions of TechniTrader, its instructors and/or employees, and are not to be construed as anything more than an opinion. TechniTrader is not a broker or an investment advisor; it is strictly an educational service. There is risk in trading financial assets and derivatives. Due diligence is required for any investment. It should not be assumed that the methods or techniques presented cannot result in losses. Examples presented are for educational purposes only.