1. Focus on Hot Stocks Hitting New Highs
As you get started with your stock market dreams, make sure to focus on hot stocks. Do your research, look into their patterns and place your focus on stocks that are already growing as you plan to stick with them until they reach new heights. Do not look to stocks hitting new lows.
2. You Can Buy and Short Sell
There are some people who think they need a bull market to get rich. This isn’t the case. Don’t ignore short selling. You don’t have to hold on to a stock for a long time to earn a profit. Just look at the success some day traders have; they are the epitome of earning off of short selling.
3. Cut Your Losses Quickly
If you want to be successful in the market, take your ego completely out of the situation. If you face a set back, cut your losses and move on fast. Do not dwell on your failure, but instead look to the future. You are going to fail, so be prepared and just be ready to move on.
4. Don’t Be Afraid to Take Partial or All Profits
The thing about your earnings is that they aren’t really profits until you take them. Don’t be afraid to take partial profits or take profits too quickly. The market changes fast; it is OK to get out when you feel it is right and take the profits that you can.
5. Embrace New Technologies
The world is changing and it is changing fast, so you need to be changing with it if you want to be successful in the stock market. Now is not a time to be afraid of technology companies. There are the companies of the future. Embrace new technologies and business models and be willing to stay ahead of the time as you look to your investments.
6. Stick With Liquid Stocks
If you want to earn some serious income, then it is best to stick to liquid, highly traded stocks. Try to stay away from illiquid stocks at all costs. These are stocks that make big promises but tend not to uptrend.
7. Don’t Believe Anything the Stock Says
In the trading world, talk is cheap. Don’t listen to promises or hype, look only on the action of the stock. Do your research look into how that stock is performing and what action it is really taking. This is how you will know what to expect from the stock in the future.
8. Don’t Diversify and Don’t Use Leverage
Don’t get too in over your head. So many people talk about diversifying and using leverage. This is not the way to earn millions. I typically keep one to two stocks at a time and don’t use more than 30% of my assets in my investments, that’s it.
9. You Don’t Need to Buy Bottom, Sell Top
So many new traders are focused on the old adage that you need to buy right at the bottom and sell right at the top. Yes it would be nice if you could as that would mean the most profits possible, but you just need to focus on the meet of the move, not necessarily the top and bottom. You can get in during the middle and still make some major profits.
10. Always Make a Plan
If you want to truly find long-term success in the stock market, the best thing you can do is to go into every trade with a very specific plan. Before you get started create a specific risk/reward profile for what you demand of your investments and stick with it no matter what. Never stray from the plan.
Earning millions in the stock market can seem like a daunting task, but it is one that you can achieve, if you follow these steps and keep this dedicated approach in mind. If you prepare yourself for setbacks and understand the challenges that can come with this investing strategy then you may just find yourself coming closer and closer to reaching your investing goals, just as my millionaire students have.