subject: How To Trade Stocks In 2010? [print this page] If you are a stock investor or a stock trader, than you need to take a look at how well you did in 2009. With this hindsight, you need to make a resolution for 2010 looking for a new start and a new trading plan that can make you 7 figures in 2010!
You should develop the trading plan based on who you are as an investor. This is an absolute must before you create your trading plan for 2010 to know what type of an investor you are. Your old trading plan may not work in 2010. What you need is a trading plan that first determines what type of an investor you are. Are you an investor? Are you are trader? Are you a long only investor? Are you a short only investor? Or are you both a long and a short investor? You need to sincerely ask these questions and determine what is the time horizon of your stock investing.
Take out a piece of paper and write your trading plan for 2010. What are your financial goals. How much you want to make in 2010. What will be your trading strategies in 2010? Write down all these things in detail and ponder over them.
Make an important resolution in the trading plan that you will become an independent trader in 2010. This means that you will make your independent judgement about what stocks to invest in. You are not going to watch CNBC or Bloomberg and buy on someone's recommendation. Well, you will hear what others say but you will make your own judgement. You will learn those chart patterns that can help you in judging what is the best time to enter the market and what is the best time to get out of the market. Your motto should be you will only trade when you are dead sure that you are about to make a winning trade. No more confused and half hearted trades. You are going to stay out of the market if you are not sure!
You need to make it clear to yourself that you are not trading the stock market, you are only trading the stocks. This means that the market sentiment is irrelevant to you. Once you have identified a stock, think what will be the best strategy. Should you go long, for how long? Should you go short and for how long? Make a trading plan that does not depend on the market direction. This trading plan should work for both the bulls and the bears.
Now, the most important resolution that you will make in the end is that risk and money management will be of utmost importance to you. You will never trade without placing a stop loss. You will only buy close to the support and sell close to the resistance. This buy and support resistance trading or what you call channel trading. Profits will come naturally if you know how to identify the support and the resistance. Then leave the rest to the power of compounding to build your account. Good luck in 2010!
by: Ahmad Hassam
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