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Trading signals are what most traders seem to be looking for when starting to trade stocks. Everyone is looking for the magic formula which will bring them instant profits. Unfortunately, there is no one signal that works in all markets all of the time or for all people. When something works every time and is easy to implement then everyone would be doing it and the end result would be that it would not work any more.
There are multitudes of trading strategies out there. They do not necessarily need to be complex as it has been shown that with a good money management system, even choosing stocks by flipping a coin, as discussed in Trade Your Way to Financial Freedom can make money.
In the first version of Jack Schwager's book "Market Wizards: Interviews with Top Traders it was concluded that all of the traders in the book were making money and everyone was using a different trading signal. This tends to indicate that the trading system you use to generate your trading signals is not really that important.
In Trade Your Way to Financial Freedom Van Tharp argues that trading is 90% psychology. Many other traders suggest psychology is only about 70%, money management is around 20% and knowing when to get in is really only about 10% of what goes into a good trading system.
Having said that, it is the trading signals that everyone is looking for so this is why you find so many different systems out there.
In some cases, a lack of time inhibits the would be trader to take action. They are not sure where to get in or get out. In this case, following someone else can be beneficial. To explore getting weekly buy and sell recommendations, you could check out check out Tyler's weekly newsletter on the Stockscores website.
To be sure, when the system you use does not match up with your trading psyche then you are bound to lose before you even begin. If you are a long term trader and are using a short term system it is unlikely you will ever succeed. Think of it this way, if you were looking for a safe, reliable car to transport your three kids around town would you buy a two seater sports car. Likely not.
One reason you want to gain control over your finances is that you will feel a lot better knowing you are in control of your finances. In a recent article that I read, discussing financial plans, the majority of respondents stated that by having a financial plan they felt more prepared. Once you begin to understand and feel comfortable trading your own portfolio, you should gain this peace of mind.
You need to match your ideas with your trading system. You can trade pull backs, breakouts, high volume moves, gaps, increase volume, moving average cross over, reversals, range bound stocks etc. And you can also hold positions for different lengths of time so you need to know where you will do the best: as a day trader, swing trader or position trader.
When you start to look at what you want to do, check how you feel emotionally. Can you sleep at night? Does your body start to give you bad vibrations when you go about trading a certain way? When this happens listen to your body, it knows what it prefers.
If you want to watch a short video that discusses just what goes into a trading system other than trading signals watch this elements of a trade. It is free and you do not even need to put in an email address. This short video gives you a pretty good idea of what you need to do to succeed in the stock market.
It can be difficult to identify with a trader you have never met. However, in some cases, you can get an idea of the types of systems which are out there by downloading a few chapters of a book. After reading or sifting through the material you should be able to identify if this trader/educator aligns with your ideas. When you align with a trader/educator and want to further your relationship you can do this by owning some of their material. A good example of this is the Swing Trading Course which offers a number of free book chapters. I downloaded this material and it looked quite useful.
Remember, your aim as a student of the markets is to learn at least one new thing with each trading system you investigate. When you can continue moving forward, one step at a time, you will ultimately reach your goal.
Interested in starting to build a trading plan then see how I have included trading signals in my trading plan.
Monte Carlo Simulator
for Traders Having troubles sticking with your trading system?
Do you move from system to system looking for the one system that will bring you riches?
Perhaps you already have it and tossed it aside when it went into a down period.
Using this Excel based program will show you what you can expect out of your trading system once you know the % wins and profit factor.
Stop wasting your time searching for the perfect system (which does not exist) and start trading.