Sri Lanka Equity Forum
Dear Reader,

Registration with the Sri Lanka Equity Forum would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
Sri Lanka Equity Forum

Discussion Forum for Stock Market Investors in Sri Lanka

සිංහල පරිවර්තනය
Submit Post
Submit Post

Latest topics

» Free earn 120$...or above
by Uaecoindubai Today at 12:01 am

» Good bye your job and earn 20-30% per month
by Uaecoindubai Yesterday at 10:05 pm

» John Keells Miserable Future until 2020
by DS Wijesinghe Yesterday at 5:32 pm

» MARKET CRASH - GUARANTEED
by Maharaja Yesterday at 4:20 pm

» Daily Foreign Transactions
by ruwan326 Yesterday at 8:01 am

» Summary of Key Announcements during the week end 13July 2018
by ruwan326 Yesterday at 7:59 am

» expo.. @4.00
by ruwan326 Sat Jul 14, 2018 7:15 am

» i am new comers forum
by sssmax Fri Jul 13, 2018 10:15 pm

» Wach out for RIL
by ruwan326 Fri Jul 13, 2018 12:38 pm

» LDEV GEARING UP
by ruwan326 Fri Jul 13, 2018 10:31 am

» BIL & FLCH
by ruwan326 Fri Jul 13, 2018 10:26 am

» CDS Form 28
by anushka25 Thu Jul 12, 2018 9:38 pm

» Financial Performance - Summary - For the period ended 31 Mar 2018
by ruwan326 Thu Jul 12, 2018 8:38 pm

» TAP & LCEM
by ruwan326 Thu Jul 12, 2018 6:48 pm

» UBC KEEP WATCHING
by ruwan326 Thu Jul 12, 2018 11:43 am

» HVA quarter results and Dividend
by anjelo Thu Jul 12, 2018 11:14 am

You are not connected. Please login or register

Sri Lanka Equity Forum » Stock Market Charts & Graphs » Successful Trading Requires Cumulative Knowledge

Successful Trading Requires Cumulative Knowledge

Go down  Message [Page 1 of 1]

sriranga

avatar
Co-Admin
It takes a lot of knowledge to be a great trader

When it comes to successful trading, most traders and investors underestimate what it really takes. If you want to achieve excellent results in the long run, it will take years of proper trading education. This includes learning successful methods, strategies, and principles. You also must develop a winning traders mindset, also known as the psychological part of trading. In general terms, you will need to acquire a lot of cumulative knowledge on your road to successful trading. In this article, I will share with you some of this important knowledge.

A trading philosophy is key

A trading or investing philosophy is important. It will dictate how you go about making decisions. Trading is based probabilities. You always want to put the odds in your favor on every trade you make. This can be achieved with a winning philosophy. It is important to note that even a good trading philosophy will not help you get the results you want, unless you combine it with essential traits, such as patience and discipline. Once you establish a winning philosophical foundation, then it is a matter of acquiring a solid education. This will lead to successful trading.

A fundamental concept that makes a big difference

One of the most fundamental concepts in trading or investing is process versus outcome. Many people who get in the markets dwell solely on outcomes. They think of the potential great wealth, and do not give much attention to the consideration of process. In any probabilistic field, including trading, the best long-term performers all emphasize process over outcome. Concentrate on the process, and make sure the odds are in your favor on each trade you initiate. Once you focus on a winning process, the results you desire will take care of themselves. This concept is important when it comes to successful trading.

You can be right over half the time and still lose overall

A lot of traders and investors believe if they are right over 50% of the time, they will come out ahead. This is faulty thinking, and is simply not true. The frequency of correctness really makes no difference. It is the magnitude of when you are right that matters. As an example, if you pick 4 stocks, and 3 of the stocks each lose 500 dollars, but the lone winner nets you 5000 dollars, you are doing quite well. Your winning percentage is 25, but your overall results show a profit of 3500 dollars. This proves a major key to successful trading is the golden rule. This vital rule states to cut your losses short, and let your profits run.

Profit from irrational market behavior

Savvy traders and investors are able to systematically exploit irrational market behavior when it happens. Key points to remember include, people are irrational, markets are made up of people, and this makes markets irrational. Understanding the dynamics of the collective is a major key to successful trading.

Markets tend to have phases when buying or selling becomes dominant. This is how major trends develop. When buying becomes dominant, you get a bull market. On the other hand, when selling becomes dominant, the result is a bear market. You can accurately interpret whether the bulls or bears are in control. This is achieved by proper price and volume analysis. Fortunes are made by trading along with the dominant side. A trend can last much longer than it really should. This is because of irrational market behavior. Understanding and implementing proper trading psychology will directly lead to successful trading.
-Gary E Kerkow - http://www.tradingmarkets4u.com

http://sharemarket-srilanka.blogspot.co.uk/

Tiger

avatar
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
Very useful, thanks for posting. I would like to know more about behavioral finance, if you have any useful posts please do post.

CHASE

avatar
Manager - Equity Analytics
Manager - Equity Analytics
Great. Thanx for sharing

sriranga

avatar
Co-Admin
@Tiger and Chase.
Thanks for the Comments.

http://sharemarket-srilanka.blogspot.co.uk/

Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum