3 Thoughts on What do I need to know about short term stock trading to be successful?
  1. Reply
    Jordan
    December 22, 2012 at 6:08 pm

    You need to know how to read a stock chart (preferably a candlestick chart), and how to use technical indicators properly. This will allow you to make decisions whether a stock is bullish or bearish in the short term.

  2. Reply
    A nobody
    December 22, 2012 at 6:33 pm

    To be a trader you must first learn how to invest. You must know the products and the markets in which they trade and more importantly you must know the rules that govern those products and markets. You should start by reading “Investing for Dummies” by Eric Tyson.

    Then here’s a list of books you should consider, at least read half of them
    Bulls Make Money, Bears Make Money, Pigs Get Slaughtered, by Gallea
    How to Trade in Stocks, Jesse Livermore
    Millionaire Traders, Lein & Schlosberg
    One Up on Wall Street by Peter Lynch
    Reminiscences of a Stock Operator, Edwin Lefevre
    The Disciplined Trader, Mark Douglas
    Trader Vic-Methods of a Wall Street Master, Victor Sperandeo
    Trader Vic II-Principles of Professional Speculation, Victor Sperandeo
    Trading for a Living, by Alexander Elder
    Trading in the Zone, Mark Douglas

    And when you think you want to trade, try some paper trading to test your skills without spending you money http://simulatorinvestopedia.com/ http://www.moneyworks4me.com/
    and/or http://www.tradingsimulation.com/

    Before you enter your first order you need to address four major policies and have very strong discipline to follow them
    1 – You need a written sound trading/investment plan with rules that will not only help you but more importantly protect you, mostly from yourself. Always use stops either to protect you on the down side or to lock in profits on the up side. Never trade on emotions, when emotions get involved walk away. Don’t try to out-smart the market, you’ll loose but if you always take what the market is willing to give you, you’ll be successful. Other words, you don’t trade against the trend since the market is always right. And NEVER trade on emotions, once you let emotions in your trades you will loose
    2 – A written money management program is essential. Remember never invest 100% of your capital into any one security and never have 100% of your capital invested. Never go into a trade without knowing when and where you are going to get out of it. Never let a loss on a trade get greater than 8%-10%, always take you loss and walk away – don’t loose more than you need to and don’t be afraid to take the loss. Remember you never can get hurt taking a profit. Never average down, but you can average up.
    3 – You must have sufficient trading/investment capital. Use your own money, there’s no need to go into debt so that you can trade and/or invest. Margin can be used but only with restraints, never let the account wall below 45% equity. Unless you fully understand margins you should not use it.
    4 – A full and complete understanding of the rules & regulations of the industry. If your going to play in the game be sure you know the rules of the game and always follow them.

    Unless you are willing to study and follow the above you will never make it as a trader. To be successful as a trader will take work and constant study of the markets and the products traded in those markets, there is no easy way.

  3. Reply
    Common Sense
    December 22, 2012 at 6:42 pm

    At least the first two of the following (all three would be better);
    1. Psychology (yours and the market)
    2. Risk Management
    3. Technical Analysis

    Read 6-12 of these books (to start);
    http://joefahmy.com/2010/03/17/recommended-reading-list-2/
    http://www.chrisperruna.com/2010/01/10/2010-stock-reading-list/

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