Trading in the stock market is not so different from running a business, except that the concept of ownership is slightly altered. As with any enterprise in which you intend to invest money, it is important that you have a sound plan and a mission statement that defines and guides your behavior.
Here are some tips on how to create your own stock market mission statement.
A common problem with novice traders is the mistaken belief that the stock market can be timed. That is simply not true. There is no way you can always go in low and exit at the highest point because these concepts are nothing more than conjectures. The best thing to do is to go with the flow.
The stock market is not a stable place. It may often give that impression but always remember that there are too many factors affecting the business world and no one can predict what development will cause the market to move in either direction. Becoming obsessed with a particular stock or getting complacent with the state of the stock market is not a good thing for any trader. Sometimes it is just wise to book your loss and move on. Being stubborn is not productive or profitable.
I will make profits and pay taxes
Always book for profits. That is the main reason for being involved in the stock market. Look for profitable trades and make yourself a lot of money but also remember to pay your taxes. You will enjoy your profits better when you pay your taxes.
I will keep my own counsel
The stock market is a good place to study herd-mentality. Quite often, you will witness traders doing something just because someone received a hot tip or an insider secret. There is no shortage of such tips and secrets and they will send a wave of activity throughout the market, often leading to the ruin of the traders involved. Keep your head, think for yourself, and always evaluate your actions.
I will be logical
Love or hate for companies or stock has no place in stock trading. You must act logically and not emotionally.
I will only trade in the best stocks
Always spend some time observing the various companies traded on the stock market. At the same time, compare these observations with the history of the company. This exercise will help you pare down the companies you wish to trade in so that you are left with the best. In order to make profits in the long term, you must trade only in companies with a strong track record of rewarding their investors.
I will be realistic
The stock market fluctuates on a daily basis. As a trader, you must never lose track of the fact that the market cannot be expected to go up indefinitely. It will eventually come down so plan accordingly.
The above is an example of what your mission statement should look like.
Alan King is a writer that concentrates on helping people better themselves, for cutting edge information you NEED to know about stock trading before you try to cash in on this multi TRILLION dollar industry I strongly suggest that you check out my friend Mark Crisp's awesome free 9 page ebook at http://www.stressfreetrading.com