All new and novice stock traders will face many battles within themselves when starting out in this business. One of the toughest battles that a new trader will face will be abiding by a stop loss and selling a losing position. This is usually the most common flaw among new traders, but there are many more. When you just start out in the trading business you will be eager to get into a trade and make money, after-all, that is why we are here! However, all too often I have seen beginner traders enter trades for no good reason at all and lose money. They simply want to be in a position, and that alone is not a good reason for being in a trade. The point I’m trying to make here is that a novice trader will usually enter a trade for all the wrong reasons, those which do not favor a successful trade. I’ve been there and done this myself, so I know what you are going through.
Here is one solid rule that will help new traders from getting hurt while they go through the learning curve…
The rule is to simply stick to trading the stocks in the Dow Jones Industrial Average (DJIA). As many of you know, this index is composed of just 30 blue chip stocks. All of these companies pay dividends and are highly unlikely to go out of business anytime soon. The reason for trading these stocks is simple, if you fail to stop out of the stock when it goes against you then you can hold the stock like most traders will do, you can at least collect a dividend while you wait for the stock to come back. These stocks are also less volatile, so they won’t hurt you as bad as some small cap biotech stocks will when they go against you. The institutional money is heavily invested in the DJIA stocks so they are easier stocks to learn on. The support / resistance levels on the charts will generally be easily recognized and better for trading when you are new to the business.
Once a novice trader can successfully trade the stocks in the DJIA they can then move on to the NASDAQ 100 stocks. This group of stocks is usually more volatile and has more growth potential. They will be a bit more challenging. The NASDAQ 100 stocks are generally technology based and provide lots of trading opportunities for novice and experienced traders. Many of these stocks pay a small dividend and still provide potential growth and big market moves. So, as one simple rule to help you get started and keep things simple, start with the stocks in the Dow Jones Industrial Average (DJIA). Build your skills and confidence there then slowly progress. However, no matter what you do, you will still need to learn all about the charts, how to read them and the money flow that it represents. Get educated on the charts and start your path to profit making today.
Bullseye Trading has logged in 17 consecutive winning trades since it began on September 2, 2019! This performance is verified and documented. Check out EVERY trade now right here.