Trading Stocks as a Business

Most traders fail to make money in the stock market because they fail to treat trading as a business.  They believe they can just buy a stock it will go up 200%, they sell and everything is good.

That is not how trading works.  Sure if you did that you would occasionally get some pretty big winners, but you would also get some pretty big losers as well.  That is why the first way you have to approach trading is by minimizing cost.

You’re going to have losing trades along with winning trades.  Your goal as a trader is to make cut your losses short, and let your winners ride. If you could cut your losses then a few big gains are all you would need to be profitable for the year.

The second way you should treat trading as a business is by developing a plan of action.  It has to be a little bit more advanced then, buy a stock it doubles and sell it.  You should have a strategy on how you plan on making it happen.

What criteria are you going to use to determine that the stock is a good buy.  Also what criteria are you going to use when trying to figure out if you should sell your stock.   These questions should be answered before you start trading.

Finally you should keep a record of your past trades to see how you have done and how you could have been more profitable.  Without keeping a record you will not know what you are doing right or wrong and it will be hard to improve.

Always remember like any business your trading should always be looking for ways to improve.  Trading is a lifelong process and should not be looked as a way to triple your money in a couple hours and … as most “gurus” would have you believe.

For More information about treating trading like a business visit http://www.stocks-simplified.com/Your_Stock_Trading_Plan.html