Trading Center

20 Trading Tips

20 Trading Tips


General Trading Tips:

1. Avoid become emotional with your trades. Emotions are essential for understanding humans but not financial markets

2. At the point where fundamental analysis agrees with technical analysis, a good trade is born

3. Technical analysis is the king in short-term trades. Fundamental analysis is the king in long-term investments

4. Analyze charts and patterns and identify similarities over the past. Human behavior repeats itself so does a chart pattern

5. Timing is the key to successful trading –its much better to lose a trade than risking to trade the wrong timing (or the wrong direction too)

6. A high increase in volume or volatility usually signifies the change in a market trend. Keep focusing on volume activity and volatility changes either trading stocks or options or any other financial asset

7. Options Put-Call ratio can be a reliable market indicator in identifying major changes in the market's trend. Forex Traders can use the COT analysis to spot potential upcoming turnarounds


Forex Books

Stock Trading Books

Commodity Trading Books

Tips for Starters:

8. You must learn to lose before you can earn from trading

9. Implement always a stop-loss strategy (at least a mental stop-loss)

10. Be patient, learning how to trade wisely doesn't happen in one-day

11. Avoid trading using Capital Leverage more than 20:1 (pros usually don't use capital leverage above 5:1)

12. Learn from experienced traders (forums, books, seminars etc)


Short-Term Trading Tips:

13. If you trade on a daily basis, pick trades focusing on high volatility

14. Find the brokerage with the lowest commissions, –it is very important if you are a day-trader. You may use Rebate Plans as well

15. Even in the short-term, don’t forget to continuously diversify your trading portfolio risk. Do not allocate more than 5% of your capital on any individual position


Stock Trading Tips:

16. Follow the trend, 75% of all stocks follow the course of their general index

17. Avoid trading stocks at periods when the “Cash-is-King”

18. If the price of a stock is doubled (100% return) from its lowest point, probably it is a good time to sell

19. Usually, stocks of companies that are market leaders, trade above $20 as market-leader stocks usually perform better

20. No matter if you trade US markets or not, always keep an eye on Dow Jones Industrial and S&P 500. These two indices are very important to all other global indexes and markets.




Identifying Investment Risk

Valuating Stocks

Day-Trade Strategies

10 Stock-Market Rules

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