All about investment

by B.M. Davis

As new traders begin to trade the markets they quite often find there is an expensive learning curve to the financial markets. The trader who has decided on technical analysis as the method of choice will soon find it's not as easy as all of the books and websites make it sound. The single biggest reason is that trading in itself is a psychological game and when putting real money on the line, many new traders panic and become the losers in the game. Those who are experienced traders realize that's what makes technical analysis in itself work. Spotting patterns caused by collective fear or greed make up the basis of technical analysis itself. New traders need to overcome the emotions of fear and greed if they are to become successful traders before going broke.

Obviously, the new trader has to learn to overcome their emotions. It's easier said than done and most honest experienced traders will probably admit that it's something they struggle with even now. Here are some ways you can learn to keep your emotions in check:

1. Perfect a trading strategy and stick with it â€" Plan your trade and trade your plan. Don't start listening to stock trading gurus and their stock picks. Stay away from most stock message boards (at least until you gain confidence in yourself). The most successful traders learn to think for themselves and take personal responsibility for their trading. When you stop following your plan and start breaking your own rules you're probably trading on emotion.

2. Don't become emotionally attached to your trades â€" If you're watching the price of your stock like a hawk and become elated when the price goes up and depressed when the price goes down, you're trading on emotion. Remember, your trading strategy should be so ingrained that you trade like a robot. 3. Take adequate position sizes â€" Don't take a position size larger than ten percent of your account value. Large position sizes are great if the price goes up but never forget that a losing trade of too large a size can decimate you're trading account. This also will help keep fear in check. 4. Remember, it's ok to take a loss â€" If you have a plan to cut losses, taking a loss is just part of trading. Even pro's experience losses. The difference is they have a plan for managing them.

Trading is a great way for anyone to generate income online and I highly recommend everyone invest in one way or another. But remember, keep you're emotions in check and learn all you can about the craft of trading. The more knowledge you gain, the more confident you will become. Keep it simple at first. Expand your trading strategy as your knowledge grows, take small steps and soon you will be able to consider yourself a successful trader.

About the Author

B.M. Davis is an active trader and the publisher of Market Master Trading Course. For more information on stock trading, technical analysis or candlestick charting, please visit http://www.market-masters.com