One Of The Most Shockingly Silly Stock Trading Concepts Of Most Traders

In stock trading, the saying let your winners ride is much more challenging than a lot of traders believe. To let your winners ride suggests do not freak out over ridiculous stuff.

A trader I know, Steve, sold out of a strong uptrending stock for a 3% gain. The next Monday when trading started, the stock continued to go up. Steve was bummed that he did not hold the stock a little longer.

Part of just how I coach stock traders consists of analyzing their thought processes and their triggers for doing things. Had Steve said that he found something on the chart (based in mathematics) that made him prefer to book profits, then things would've gone in another way.

I asked him what made him close out of the stock that Friday. He said that he just didn't like to hold the stock going into the weekend.

What is he talking about?

Professional traders will often close out positions on a Friday. You aren't some institutional trader with millions of dollars at risk. You're not a market maker either. You do not have a whole lot of funds in jeopardy.

Do not forget, the objective is to let your winners ride and cut your losers short. If someone makes a rule that you cannot hold a stock over the weekend, then you're not letting you winners ride. You will instead be letting go of your winners too fast.

Steve sold out of a strong uptrending stock for a foolish reason. You can not sell out of stocks for foolish reasons if you wish to let your winners ride.

You'll find that there's going to be quite a lot of stuff that bother you in stock trading. One of the things that should not bother you is if you ought to hold over the weekend. You shouldn't stress the tiny stuff.

Making a rule like you're not able to hold any stock over the weekend works best for professional traders nevertheless it's not going to work for you.

Creating rules of this nature is like trying to punch your way out of a paper bag while tying up one arm. Do not put arbitrary obstacles in your way like thinking I can only make profits Monday thru Friday but I have to sell on Friday because I won't hold any stock over the weekend.

A number of investors put a lot of obstacles in their own way. I recall a trader I met who'd only purchase blue chip stocks that paid a dividend. He also was a Christian and therefore the company would have to be morally ethical. Additionally, he had quite a long time horizon and therefore it needed to be a stock which he was able to hold for about five years. He came to me and wanted to understand what I could do to assist him in becoming a profitable trader as he was not capable of making money in the stock market. When he told me all the rules he used in his trading I just began laughing. I put my hand on his shoulder and said that he ought to either accept the fact that he's stupid, or that he'll never make money in the stock market and therefore he should get out.

Do not put obstructions like these in your way. Trading is hard enough without tying and arm behind your back, wearing only one boot, and putting on a blind fold.

Let the market tell you what to purchase and when you need to sell. If you are in a strong uptrendng stock, just chill out and enjoy the ride. That's the best way you are going to genuinely be able to let your winners ride.

For more stock trading lessons check out this one on the opening range breakout

Stock Market Outlook For Trading Week Starting March 21 2011

Last Sunday, I said that bears had a minor advantage starting trading the week of March 14 2011. For the next week, my outlook is similar: bears have got a slight advantage starting trading next week.

Take into account that the advantage bears have over bulls is incredibly small. This is not a yahoo strong downtrend rating so let's short this market.

The Dow is in a weak downtrend. The Dow Jones attempted to retake the 50 day moving average on Friday, but was denied. Now that is just a Friday so we're going to need to hold out and see if the 50 day moving average becomes resistance next week.

The S&P 500 has a sidelines rating. This means that you should be in cash right up until a dominating group, either the bulls or the bears comes forth, and then place your bets on that dominant group. A sidelines rating isn't really bearish, nor is it bullish. It simply means there is not any clear trend in either case.

In the small cap universe, the Russell 2000 is in a very weak downtrend which is surprising as small caps are holding up a little better than large caps. The Nasdaq is in a weak downtrend rating..

The trend with all the different major indices sustains my thesis that bears have a bit of a advantage going into trading next week.

For the first time within seven months, the number of stocks trading above their 50 day moving averages on the NYSE has slipped below 50% to close the week at roughly 42%. This also props up the thesis that bears have a minor advantage entering trading next week.

The percentage of stocks trading above the 200 day moving average line on the NYSE is 76% which shows a bullish bias.

The United States dollar is in a strong downtrend and is testing the November lows.

Gold continues to be discouraging for gold bugs so far with a sidelines rating. With the largest earthquake ever in Japan, a giant Tsunami wave that wiped out over 10,000 people, a nuclear power plant melt down in the world's third largest economy, and war planes bombing Libya, gold should be over $2,500. The very fact it's not is the market supplying you with a really clear message: gold is overbought and there's very little buyers planning to buy it up here.

Silver continues in a strong uptrend.

The VIX has been downgraded to a sidelines rating. The VIX measures the amount of put buying on the futures market and so it is an important leading indicator. Three weeks ago, I alerted you to the point that the VIX was in a very weak uptrend. That uptrend rating was downgraded this week with a big pullback Thursday and Friday of last week. The pullback was so massive, it did technical damage to the vulnerable VIX very weak uptrend rating. The sidelines rating suggests that the VIX is no longer giving us a trading signal: either bullish or bearish. We'll have to wait and see what goes on next week.

On the fundamental analysis front, two key economic indicators are coming out in a few days which have the potential to move markets. The Durable Goods Orders shall be published on Thursday, March 24, 2011. After that, to end the week, on Friday, March 25, 2011, the GDP report shall be released.

For more stock market news and investing ideas check out these links:

Stock Trading Trolls

Trading Trolls

A troll sent me a comment about a previous video clip where I celebrated making 5% in a stock after holding for a month. The troll said, "I don't see why you are so happy making 5% in a stock after holding it for 4 weeks. Ohhhh... big money, don't spend it all in one place." Worn out cliché aside, this troll must understand a critical fact about investing. This is simply not Hollywood. Trading and investing, I'm talking about genuine profitable stock trading is smaller gains day in and day out, week in and week out, month in and month out, year in and year out. Whatever false idea Hollywood has put in your head about the esteemed and thrilling life of being a stock trader, you have to let it go. You just aren't going to become rich by picking out the next Wal-mart or Microsoft. You need to stop trying to hit a home run with every stock you purchase. Just focus on getting a base hit. How's that for a exhausted cliché? Returning to the troll that was making fun of my 5% gain in 4 weeks trade. Let me do the math. If you start out with just $2,000 in your trading account and make a 5% gain a month, in 1 year your $2,000 will turn into $3,200. In 4 years, your $2,000 will turn into $13,107. In reality, starting out with $2,000 in your trading account, if you make just 5% a month, your initial $2,000 will turn into $2.3 million dollars after 15 years!

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How To Trade And Win

Now don't you enjoy it whenever you slam dunk a trade? That's really what we did in FCEL. Within 2 days, we landed a 7% gain. Where did that money originate from? It originated from other traders that put their money in the stock. We took those funds and ran. These other traders had no intention of giving us their money. The reality is, these folks were hoping to take our money. In this video tutorial I'm going to reveal to you the trade we just made for 7% profit in barely a couple of days in FCEL. I am also going to tell you the stock screener tool I used to find this winner.

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Locating Best Prices For Gas

A penny saved is a penny earned. Discovering methods to cut costs as a way to put more into your trading account can really explode your trading account balance. A few weeks ago, I did a video regarding how tracking gas futures will let you predict the price of gas in your area by two to three weeks. I predicted that gas prices in my area would cross above the all important $4 per gallon within two to three weeks. It happened as I forecasted with gas prices exceeding $4 per gallon in my area. This $4 level is really significant as it's the point that Ben Bernanke said would start to hurt the economic recovery if prices stay above this level. Picking out the lowest gas prices locally is as simple as visiting a website and putting in your zip code. Look into the web site in this video that is updated everyday with the lowest gas prices in your area.

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