Organize Your Current Trades To Get Significantly Better Investments
You have certainly heard the old saying "If you fail to plan, you plan to fail." It couldn't be truer within the world of trading. None of us start to trade with the intention of disappointment, but that's just what we are doing if we blindly look for trades to put our money into without a proper plan of attack.
The very first step is to find a time that you'll be able to devote to planning every day. It does not need to be a huge amount of time, but I would advise you to start off having a 30 minute to an hour block of time.
I know we all get busy and it's easy to skip a planning session here and there. But if you are serious about making money in the market, this is a step that can't be skipped. Block out some time to plan, and don't let the minor distractions in your life get in the way.
I start each planning session by reviewing the industry calendars. This is quickly done in the Dedicated Trader by going to the calendaring section. I look at the economic events coming up for the following day as well as the rest of the week.
If there are any major economic events that might affect the markets, I need to know so I can prepare by tightening my stops. And you will find some events, like the FOMC minutes, that may create great trading opportunities.
I additionally check the earnings calendar to determine which companies and sectors might be announcing earnings that week. You do not need to get caught off guard by a company you happen to be trading announcing earnings without you knowing about it.
After reviewing the calendars, I go into charting. I begin with a chart of the S&P 500 to observe what condition the overall market is in. Is it trending up? Trending down? Moving sideways? It will help me set my trades up.
I prefer about seventy five percent of my investments to be in the direction of the markets. If the market trend is bullish I want most of my trades to be bullish.
I let the bullish market pull my trades along to give me a greater success rate. I also diversify by selecting stocks which are bucking the overall market trend. For example, in bullish markets I attempt to locate the stocks and sectors that are the most bearish.
I put about twenty five percent of my investments in those plays. If the market reverses, these bearish plays become very big winners for me.
This really is merely just the beginning of my planning. If this is all too time consuming for you to attempt, seek the advice of an investment professional. They're able to help you plan ahead correctly. Simply search: merger acquisitions, companies go public, or company go public. It is the most efficient approach to make money.