Posted by forex at 2:21 AM
Read our previous post
1. Practice risk management. Preserve your capital until you see favorable price trends appearing and then decide how much to buy or sell based on how much money you can afford to lose.
2. Buy breakouts. When a stock begins to make an upward move, it is more likely than not that the price will continue to go up in value. This is the time to buy.
3. Follow the price. You don't have to know a lot about the market to compare and study prices and measure price movements. Base your trading decisions on the current price of a stock, not on what it may or may not do in the future.
4. Expand your horizons. It is not unusual for many traders to focus on only one market. Many investors trade securities because that is what they are familiar and comfortable with. The trend-following method can also be used very successfully in the currency and futures markets.
5. Expect market ups and downs. You must practice self-discipline to stick with your position when a trend momentarily isn't going your way.
6. Consider purchasing trend-following software. There is a slew of it out there. The software can help you locate and analyze trend days, find profitable trading patterns and send you trade signals.
7. Be satisfied with small, but consistent, profits. However, you'll want to make sure that your average loss is smaller than your average win.