Various Stages of Becoming a Trader
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Much has been discussed about the stages that a typical trader will encounter as they progress on their journey to profitability. In this article we will explore the some key phases that every trader goes through as they develop as a trader. At every stage along the way (until you reach final stage), there is a likelihood that your journey will end. If anyone sustains in these stages, their chances are bright to become one of few that can proudly state that they are a consistent, professional trader.

Stage 1 – Trading on hearsay:
This is where most traders/investors start, and end, their journeys. They are totally dependent on what they have heard and seek for advice from friends and people into the same field.  These Traders have little or no understanding of the concepts of risk or money management. Sadly these tips cannot go on forever and the journeys of these traders will invariably end in 1 of 2 ways. Now, rest of the people who decided not to quit will move to second level.

Stage 2 – Information overload and the Holy Grail:
By enter into a wonderful and exciting stage 2, people will consume as much trading material as they possibly can. Here people focus more on getting some great trading systems which allow them to win the race.
They will purchase some trading systems to help them with solutions and suggestions. They will constantly search for the Holy Grail – that one system that delivers consistent profits. They will have number of success to feel great about. In fact there is no such thing as the Holy Grail, until you yourself do not know about the basic of trading. Many people who lose hope will now quit, as they think they have tried everything in their control in order to make money in the stock market.
Those that don’t quit will move to a different and even more challenging stage in their trading journey

Stage 3 – Profit and Loss (Large P/L and emotional swings):
One day thinking you have made it, the next thinking that you have not. If anyone can makes it this far than they have a great chance of achieving the success. They have learned some great lessons on the way to this stage like, do not completely follow what other people are saying, there is nothing called Holy Grail if you are not clear with your basics of trading.

At this stage people have started developing the mind of a knowledgeable trader. They have learned what kind of trader they are and there concept about themselves as technical or fundamental, trader or investor, short and longer term trader is clear. They will know what is important in trading. Few traders will actually give up at this point, many will continue to trade with a modicum of success.

Stage 4 – Consistency:
The early stages of being a consistent trader can be like sitting on a knife edge. There are periods when you suddenly believe you are back at Stage 3, a series of losses can still occur and you begin to doubt your ability and your system. This is not unusual, but most traders at Stage 4, will have begun to develop a traders mindset.  This Stage can last for years. Understanding and dealing with emotion can take many years. Until such time as wins and losses do not affect your mindset you will remain at this stage.

Stage 5 – Professional:
Stage 5 traders are the rock stars of the Industry. They are sat in their home offices totally comfortable in their ability to make a living trading the financial markets. They have experienced periods of profitability and periods of loss and are agnostic to both. They accept that trading is simply about probability and being consistent in their approach of finding and trading edges. They will also likely have sizable trading accounts as they will be risking 1% or less on each position and looking to make 2-3% per trade.

Understanding the journey and the Stages in that journey will help us all to plot our paths to Stage 5.

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Stock Management Software Is A Must Have Tool
Now Playing: Stock Charting Software, stock investing software, stock market software, stock management software, stock trading software, sto
Topic: Stock market

The rising stock market condition comparing to the previous few years have opened vast opportunities of investment and saving money by that. The open market, recent economic and financial policies have transformed the investment industry into a more flexible and approachable area for all class of people.

Those with moderate earning can now think of buying and selling stocks and make it as an avenue for income. This revolution has set trends for wide spread investments in stock trading by all types of people from various backgrounds. Sometimes, they do not even have enough idea how to handle a stock portfolio or a single stock. For this often they end up with huge loss. But if you can proceed sensibly with a prior knowledge on stock management and a little awareness on the basics on stock trade, you can save lots of money.
Here are few tips on sensible stock management process to save money

• Before you start buying a stock analyze the market condition and the prospects of various industries including different companies. There are many risk factors that you always should be aware of. There can be market risk, credit risk, interest rate risk, inflation risk, currency risk, liquidity risk etc.

• Calculate the beta of the market. As you will know the beta value, you can easily apprehend the forthcoming changes in stock market.

• Estimate the correlation. It will help you to presume the change of an index with the time series considered.

• Acknowledge the volatility of the stock. This is the ultimate help to determine the behavior of a stock.

• The return and risk ratio of a particular stock market can guide you on where to invest and how much to invest.

• Also calculate the value at risk to measure the risk of a single stock or a stock portfolio.

• To neutralize the risk, consider the option for hedging. Hedging is the complete process of analyzing and determining the necessary steps to be taken on a single stock.

• Consider the drawdown option to save money. A drawdown at the correct time can fetch you huge amount of money. Also the amount of drawdown affects on the profit value.

• There are different options of position sizing. There are fixed amount model, baseline model, equal leverage model, percent volatility model etc. Choose the most suitable one to save maximum amount of money.

• As you buy the stocks, determine alongside how much money you are prepared to lose. Then set a stop loss level to save money.

• Along with stoploss level, calculate the cutloss and takeprofit levels. Also test the liquidity of the stock to determine the characteristics of your stock.

• Do not forget to raise the stoploss level as your stock starts to get profit.

• Along with these basic financial and market analysis procedures, you must enhance your own personal character to suit with the changing stock market. You need to be very careful, organized, analytic, patient and a strong ability to take decision sharply and implement them completely.

By following these basic tips for sensible stock management process, you can save money and earn huge profits at once.

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Article Source: http://EzineArticles.com

Choosing a Stock Trading Software
Topic: Stock market

Stock Trading Software is a powerful tool to make money doing day trading. However, it should be used with proper care and guidance.

Stock trading dates back to the 17th century when the joint stock corporation was first invented; stock trading has several emergent behaviors from the way it works. In particular, there are advantages to having the information you need before everyone else gets it, and there are advantages to being able to execute your trades faster than anyone else can. Stock trading software attempts to put those advantages into the hands of a typical investor with a computer.

In its core precepts, stock trading software really got its start in the 1970s, when mainframe computers came down in price that they could be used to aggregate data and put it in front of traders in scatter plot and graph forms. When the PC revolution happened, this capability got more widely spread, and as the network revolution of the Internet came about, the amount of data available grew exponentially, as did the number of financial vehicles trying to use it.

Modern stock trading software tries to not only give graphical plots of the data it's gathering, but tries to match it against a database of billions of successful trades from highly trained professionals. This tries to use logical statements about what trades were made and why. Thus, it's trying to not only gather and present the data; it's trying to interpret it for you as well.

This makes modern trading software much more fluid and easier to use than it's ever been before. That means it's a much more powerful tool, with an easier learning curve.

However, since stock market trades run from plays on daily - even hourly - volatility, analysis and recommendation isn't enough - it also needs to be able to manage automated buy and sell orders. And with this, we run into a conceptual gap.

With software that's this easy to use, it makes it possible to sell it to people who are desperate to make money fast, but have no formal training in day trading or how stock markets work. It's entirely possible for someone to get in over their head, doing leveraged trades, without really understanding what this means.

In the end, stock trading software is a tool. It's not an expert stock trader in a box, no matter how much its marketers say it is. You can use it (and we recommend stock trading software to anyone who wants to work the markets), but we insist that you get a good education about what it does, how it does it, and how markets actually work before putting your trust blindly in it.

Just remember - to succeed at stock trading, stock trading must be your job. You must treat it like a job, take the time needed to research your positions and exercise judgment to be successful at it.

You can do the same by choosing great software that can help you. Tackle the issues surround day trading by letting professional software find the next big penny stocks for you.

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Article Source: http://EzineArticles.com