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Excellence In Trading >
What To Trade
What to Trade
Have minimum criteria to determine your watch list of
candidates. These are your standards on which a decision
can be based. Criteria define potential candidates.Period.
The criteria should be clear, easy to calculate, and easily
understood. The criteria must be usable, meaning available
and understandable. There are thousands of stocks, minimum
criteria helps you pare down the possible candidates.
Some ideas -
• Know what price range you will trade. Only you know your
financial situation.
• Know your ability and experience level, no one else can
judge that but you.
• What is the time frame? Is this speculative trading
capital or your IRA and savings.
• Are you trading for income? Growth? Dividends or selling
covered calls? Can you identify what has to be done to
create income?
• Is there an industry that you particularly prefer?
• Do you understand stock cycles and sector rotation? If you don’t understand
your criteria it is hardly likely to help you.
• Know your risk tolerance; no one can tell you that. It is
personal.
• Have a trading plan before you commit any money. What is
the PLAN? If you have no personal discipline then your
results will be like everything else you have done in life.
Trading does not cure problems.
Whether it is TOP SCORE, or your own research, the Great Xpectations™ List, or ETFs, anything can
be ideas for trades. The ‘WHAT’ is subjective. Profits are
a result of HOW you trade, not WHAT you trade. So take your
ideas and paper trade, find out if you know anything.
There are many ways to trade, but only one acceptable
result. If what you have been doing is working, keep doing
it. If you want different results, do something different.
One last important point - when you know how to trade, you
know what to look for and you automatically choose better
candidates. With portfolio management, we “first do no
harm,” which means minimizing risk within the context of
high profit expectations.
“How we trade is more important that what we
trade.” Now, Go Trade the Right Way!
Charles and Candy Schaap
Contact Dr. Schaap: stockmarketstore@yahoo.com
Sign up for the Journal for Excellence in Trading right here.
Books, DVDs and CD can be purchased from stockmarketstore.com
Address: StockMarketStore.com, Dr. Charles Schaap, 1204 Main Street, STE 335, Branford, CT 06405-3787
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