How to improve
every day stock trading results
Why loss in online stock trade
is not a problem
Each trader or investor wants to achieve best every day stock trading results. These expectations are based on type of stock trading for each individual trader.Pattern day trader wants to make money every month to be independent. Active investor or trader doing swing stock trading or position stock trading could be satisfied with profitable quarters or half years even if some month will not make gains. Every beginner who learns how to trade stock market thinks that he must do only profitable trades to make money. But it is not true and it is also not possible to make only profitable trades. There are trades that are closed with profit and there are online stock trades that are closed with loss. But the size of the outcome is the key.
List of every day stock trading results
for any online stock trade
Any online stock trade could be finished with one of this outcome:- Small loss
This is typical outcome of a lot of stock trades. This result comes when trade is finished on a
stop loss
level or a
trailing stop
level - Small profit
This type of trade results is also quite common. This type of trade finishes on values above
entry
regardless of reaching the target. - Big profit
This type of trade means that your trade exceeded your
profit expectations.
Every trader has trades like these every year. These trades often move the size of the trading account to a higher level. - Big loss
This is worst result of any online stock trade. This type of stock trading results must be avoided. Trade finished with big loss is often not
well managed.
Such result of any online stock trade signalizes that trader does not use his/her trading rules or that there are not any rules defined in
stock trading business plan.
How to avoid big loss
in any online stock trade ?
What are key steps to avoid big losses in intra-day stock trading or swing stock trading ? The first is realization of losses. It is not possible to trade or invest without losses. There are losing trades and there will be losing trades. This is more psychological aspect then anything else. Every trader must understand that there are profitable trades and there are losing trades. Every trader should accept this. Second step is to avoid big losses. Yes, when we look at list of possible stock trading results described above, the most important is to do everything to avoid big losses. These losses will come when trader or investor do not follow rules. When trade goes against him and turns into loss and he fails to exit such trade. In this case short term trader often become long term investor who hopes that something will happen in the future and he will be able to sell his position for break-even or small profit. Most often then not it will not happen. And former trader finishes his trading as his account is buried by such huge losses. Just check this chart of YHOO stock. If trader did not apply stop loss during Internet bubble in 2000 then he has not seen prices above 70USD yet.
Key stock trading terms
for better trades
Based on this example and definitions it is possible to define two key stock trading terms that should help to improve every day stock trading results.Stock
trading business plan
is first one. This plan should describe all important
stock trading rules
that has to be used in every day stock trading activities. Second key stock trading term is
stop loss.
Stop loss is part of
trade management
process that helps to achieve best stock trading results.
Return back from Stock Trading Results to Stock trading strategy
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