Binary options trading can only be profitable if you trade by the rules. The rules form the discipline of the trader, and allow you to create a method and system for trading.
In this article, you will find the rules for successful trading in the financial markets.
- We’ve just finished William O’Neill’s 24 Lessons for Success in Investing, and we’ve found it to be a great selection for beginners. There are a huge number of great investment tips that are summed up at the end of each section, and in order to summarize the book itself, we will publish 60 of them.
- The best thing about this book is the simplicity of the material. It’s easy to read, everything is clear, and this is the best example of O’Neil’s style, which is widely known not only to his fans, but his strategies are used by many investors to this day.
- 60 tips to help you achieve success in investing:
- You are a new investor, so be prepared for minor losses.
- Always reduce costs by 8% of the purchase price.
- In learning to invest, the main point is perseverance. Don’t despair!
- The ability to invest does not come overnight, it takes time and effort, only then will you succeed.
- In the beginning, it is important to find the right broker. Make sure the broker has a good reputation.
- Use a cash account, do not trade on credit.
- In order to get started, you will need between $500 and $1000. Experience is a wonderful teacher.
- Avoid investing in volatile assets such as futures, options, foreign securities.
- Concentrate on some high-quality securities. You do not need to purchase twenty or more types of different securities.
- Do not succumb to the influence of emotions. Carefully follow the rules of buying and selling and do not let emotions influence your decision.
- Do not buy securities that are priced less than $15. The best companies, the leaders in the market, just don’t sell shares for $5 or $10.
- Learn from market leaders – tomorrow it can lead you to success.
- Always do an analysis of all your trades, this will help you learn from successes and mistakes.
- The combination of fundamental and technical style is important in order to choose winning options.
- In fundamental analysis, you look at the company’s earnings, earnings growth, sales, profits, turnover. This helps narrow down your choices to a few quality stocks.
- Technical analysis, on the other hand, involves learning how to read the stock price and volume from the chart and make the right decision in time.
- In order to make big money, you need to buy shares of the best companies at the right time.
- Strong sales and earnings are some of the most important characteristics of winning securities.
- The acquisition of shares when the price goes beyond the usual limits is the basis for the possibility of large earnings.
- Always opt for stocks of historically leading groups or sectors. The bulk of the market leaders were in major industry groups and sectors.
- Many winning stocks are from industry sectors such as medical and pharmaceutical, communication technology, software, trading, entertainment.
- The volume of shares present on the market
- Stock prices never go up for no reason. There should always be significant purchases, usually by significant investors, such as mutual funds and pension funds.
- When studying the most significant companies in the securities market over the past 45 years, the foundation was formed just before the market once again broke through the price and significant money began to be made there.
- The most common sample is a cup with a handle, so called because it looks like a cup of coffee, side view.
- The turning point is the optimal moment to buy stocks.
- On the day when the price passes the level, the volume tends to increase by 50% or more.
- A decrease in price or sales volume indicates that there are no significant sales.
- Replace the old-fashioned phrase “buy low and sell high” with the modern “buy high and sell high.”
- You want to buy a stock at a turning point. Don’t chase a stock that has already passed a turning point by more than 5%.
- The price on the chart and volume often help to recognize when a stock has reached the top and needs to be sold.
- The history of the non-securities market always repeats itself.
- Most stock market leaders are pushing stock prices up 20% in eight weeks, or less, from a turning point. Never sell a stock that passes this milestone in 4 weeks or less, it is the one that can bring you a big profit.
- The common market is represented by leading representatives such as the S&P 500, Dow Jones Industrials, and the NASDAQ Composite. Keeping track of events taking place in the general market is the main successful trader, as most stocks follow the trend of the general market.
- In the market, ignore personal opinions.
- With a typical bearish movement in the market, the price deviation from the peak will be from 20 to 25%. A negative political or economic environment can cause a more serious deviation.
- The key to success is knowing where to sell and buy a stock.
- Three stocks out of four, no matter how good or bad, will still follow the trend in the main market.
- Four to five days after the distribution, within two to three weeks, the market will return to normal and the trend will become downward.
- A bearish movement in the market breeds fear and uncertainty. When the price falls down to the lower limit, a bullish movement begins, which brings with it a huge number of opportunities. But most people until that time simply do not believe in it.
- For a certain period of time, on a decline, the indices will rise or simply freeze in place. The market is trying to raise prices after a period of falling prices.
- Most of the market’s technical indicators don’t really matter. Psychological indicators, such as Put-Call, help confirm changes in the direction of the market.
- As soon as you find that you are working in an upward market, you should immediately buy the best stocks.
- Potential winners will have significant earnings and sales growth, increased profits and high returns on securities (17% and above). They should also be in the leading industrial group.
- Using a chart will help you determine if you have chosen the right time to buy a security.
- There are two main types of investors: investors in the growth of a stock and investors in its value.
- Growth stock investors are looking for companies with significant earnings and sales growth, excellent returns, and returns of more than 17%.
- Stock value investors look for stocks that sell at a lower price.
- Don’t complicate the process when you start investing. Invest only in home securities or mutual funds. (Education on the resources of Fund Loads Scams and Mutual Fund Fees is a necessary stage that must be completed before you start investing, you can also consider ETF investing)
- You get what you pay for. Cheap stocks tend to be inexpensive for a reason.
- Options are risky, as the investor must not only correctly determine the direction of movement of the stock price, but also the time frame in which the price will move up or down.
- Futures, due to their high speculativeness, can help only those people who already have at least several years of successful experience in the field of investing.
- There is no need for significant diversification and asset allocation. Concentrate resources in fewer places, understand them well and carefully monitor them.
- If you have an investment amount of less than $ 5000, buy one or two shares. If 10,000 – two or three shares, 25,000 – three or four shares, 50,000 – four or five shares, 100,000 or more – no more than six shares.
- If you already have the maximum number of shares, and you would like to see a new stock in your portfolio, force yourself to sell the most unprofitable shares, get money for them and buy new ones in a new name.
- When buying a stock, buy only half of what you would like, especially at the initial stage. Buy in small quantities if the price rises by 2-3% from the first purchase. Always what rises in price, not what goes down.
- Don’t let yourself lose money after you’ve already earned a significant amount.
- 40% of the stock will eventually return to its original purchase price, at least for a day or two. Don’t let this fact fool you into selling your shares.
- Sell stocks only if the stock price has been falling for at least two consecutive quarters.
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