Winning Stocks Always Leave "Foot Prints"

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SIX STEPS and the IRREFUTABLE LAWS of the MARKET Every Investor and Trader MUST KNOW to Succeed:

Step 1:
A move begins with the sponsors (smart traders) who have insider knowledge as it relates to a particular stock or market. This information will move a market up or down depending on the insiders' information. These buyers are smart, very smart, and recognize trading/investment opportunities very early in the markup cycle.

Step 2:
Days, weeks, or sometimes months after a move has started, there is a brief mention in the electronic media (radio, cable, TV) or on one of the internet chat boards that a market has moved. The public hears for the first time and begins to get interested, but does not buy.

Step 3:
A blurb of information appears in print media. The move also begins getting more exposure on blogs and internet message boards. The public starts paying a little more attention, and will buy a little bit.

Step 4:
Wall Street and LaSalle Street brokers go into full hype mode and hawk the market to their customers. The public begins buying in greater volume.

Step 5:
A full-blown front-page article appears about the particular stock or market in one of the major financial newspapers, magazines, or financial websites. This is often six months after the fact and after a market has shown its greatest appreciation. There is often heavy public buying, even a possible frenzy, as all media, brokers, and so-called "gurus" start to tout the market.

Step 6:
As step 5 gets underway, the sponsors or smart traders begin to move out of the market and take their profits off the table.

The finale: The move ends, the market falls, and investors lose money.

The system is always right! It's the user that fails!

KudoSurf Me!Follow @twittablogger

Why is it that some people are successful in trading the markets while others fail? Is it luck that determines if you're successful in earning big bucks? Is it the system or strategy that a person uses which determines their success? Simply put, I believe the strategy that a person employs will ultimately determine if they are consistent winners in the market.

Every system that exists on the internet will show YOU how to make money using it. Without a doubt, it will make money for you. The question is usually how much money will the system make for you? That's important but a discussion for another day. Anyways...... All the systems out there will show you how theirs has worked base on historical data or activity and then at the bottom of the page there would be a disclaimer clause that states ‘.. Historical data does not determine or guarantee future earnings....’

So why is it that these sites or page include this disclaimer clause?

The disclaimer clause is incorporated because they (the promoters of specific investing systems) know that they can't control one key element that is crucial to success. Human emotions!

Human emotions can easily become the keys to success or the root cause of failure in any business including trading. You can read all the stock investing books you want. You can buy every investing system in existence. However, if you can’t control your emotions, you can’t succeed in the markets. (I.E. LENNY DYkSTRA) Again, this is the reason for the disclaimers because human emotions can destroy even the best of investing systems.

Thus, my belief in forming a strategy that controls or manages these emotions. If human emotions are the biggest pitfalls to investing and you incorporate a strategy that manages that short fall you will ultimately gain a much higher probability of success.

In the market there are two emotions that every trader will experience; GREED and FEAR. When these emotions appear it's not how we eliminate them but rather how we act on them. These emotions force us to ACTION, thus how we act on it will determine the outcome.

All too often when we begin to see two or even three consecutive losses while trading we begin to express doubts in our ability to trade. When this happens we are entering a state of fear, that is, we fear losing more of our money and thus begin to doubt our current investing system. How do you react? Some bail way before they should and ultimately lose out on future gains. Others don't bail when all signs point towards that being the right decision. Your strategy in controlling your emotions and making an educated decision based on your system will always lead YOU to the correct choice for YOU and your financial plans. Having this strategy will lead you to make decisions based on logic as opposed to fear. Thus, making your decision to bail or hang in there an educated one.

On the flip side, when we begin to see consecutive gains we generally become over confident. We start believing, " WE CAN make a killing doing this!" Many start tweaking the system by putting more money in the market to leverage our earnings or by taking on more overall positions. In many cases this leads to deviating from the system as Greed has taken over our emotions. YOU MUST HAVE A strategy that enables you to overcome Greed. Whether that's a definitive selling points or a definitive amount of cash your willing to wager (IE $2000 per quarter) on the markets. YOU MUST understand yourself and take all possible precautions to dissuade yourself from throwing all of your eggs in one basket. Far, far, far to many people can't control this and as fast as gains appear they disappear even faster.

I personally put a set amount of cash into my E-Trade account for a six month period (I take long positions). I tell myself " I simply don't have any other funds for six months and no matter how good my gains are I don't have any other money to spend." After six months I re-evaluate my positions and move forward.

"The system is only as good as the person using it" is a saying that has been around for awhile and for good reason. IT's TRUE! The discipline to act on our fears and greedy emotions will determine our success in the markets. Thus, creating a strategy on how you will react to these emotions is PARAMOUNT to success. Starting to see a common theme? Your strategy should be on Discipline and how you will react to the highs and lows of investing. You need to understand your personal strengths and weaknesses and plan accordingly. You must have the discipline to follow your plan of action and overcome your greed and say, "I have reached my target. I should take profits now even though it may go higher." Vice versa "I have to take a position even though the market does not seem to be moving in my favor." when fear sits in.

NO matter how good the system, the only sure way to lasting success in the market depends on your strategy of overcoming personal emotions that follow the inevitable highs and lows of investing.

15 Characteristics to becoming a Stock Trader!

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Trading stocks isn't everyone’s cup of tea. Some people can do it and some can't. Even among the some who can, not everybody can be successful at it. While there are no hard rules on what makes or doesn't make a successful stock trader, those Wall street Wizards that you hear about who made the most in the least amount of time, all appear to have certain characteristics in common. Though these characteristics don't guarantee success they do illustrate whether your thinking and acting like a successful stock trader:

1. Successful stock traders are able to go against their natural instincts.

2. Successful traders have a simple system. No matter which technique you use as long as you stick to it. A Successful trader knows only their own techniques and makes trades based ONLY on this system. "The secret to being a winner is consistency of purpose". Use the same strategies to enter the market and to exit the market and you'll always know what your getting.

3. Successful traders are risk Adverse. Successful traders don't like losing money and prohibit themselves before losing too much, even if it means admitting they made a mistake.

4. Successful traders are willing to make mistakes. Successful traders have the ability, not to do the right thing, but to do the wrong thing. It's the ability to make your own mistakes.

5. Successful traders expect to take losses and know when to cut them.

6. Successful traders know, or learn how to explore stocks. Many traders only use precise analysis, but you may want to learn to use fundamental analysis as well.

7. Successful traders lead balanced lives. We all know the pleasure of the pursuit and the stock market can be addicting, a successful trader is one who knows when to move away and can.

8. A successful trader is Patient. A successful trader let’s winning positions run, but is able to back out when proven wrong. Patience can mean resilience, courage, and conviction for when markets go against you.

9. A successful trader has a biting Desire to succeed. Triumph takes steady work not a chaotic effort, a biting desire to succeed can make all the difference in educating yourself about what you want to know and sticking to your strategy when the going gets rough.

10. A successful trader is disciplined. Very disciplined. A successful trader will do what he needs to do, even if he isn't in the mood. Discipline also means Sticking to your strategy, not abruptly buying or selling on a whim, or because of a" hot tip"

11. A successful trader knows the difference between defensive and offensive behavior, and when to use each. - protect your money first, profit later.

12. Successful traders don't eavesdrop on rumors or get emotionally involved. To be a successful trader you have to be very hard on yourself. Your have to be able to resist the urge to prove you are right and be ready to make mistakes. Setting up stop loss points for every decision you make is something that you are going to have to do. That will mean more than occasionally admitting that you are wrong. You and your portfolio will survive and you will be able to get back into the position again when trends signify that the time is right. You will have to learn to disregard any emotional ties you have to your stock and make quick stock trends your master. You will miss the lowest entry points and the top selling points, but you will be able to sleep at night. You will need to learn to get out of a stock position before your profits turn into losses.

13. A successful trader knows themselves. Successful traders must be attentive of their strengths and weaknesses. Your strengths and weakness will become very important. Play on your strengths when you can.

14. A successful trader knows their investments. Your investments are almost as important as you are. Know the past history of the stock and their strengths and weaknesses as well.

15. A successful trader sticks to the rules. The system is there for a reason. Nothing can ruin a successful stock buyer as quickly, or as certainly as flouting the rules.

Get to know these 15 characteristics and you are on your way!