Your decision to develop short and long term trading habits while approaching equity markets, in my opinion, makes one more rounded when it comes to obtaining skills as necessary to survive in the fast paced business of trading and investing.
I suppose I should incorporate within these thoughts my personal disclaimer concerning the risks involved with any investment idea where money is exchanged.
Creating investment wealth involves varying degrees of risk and you should do your homework, consult legal and/or professional advice before participating in any investment endeavor. You should only invest money you can 'afford' to lose. I personally trade my own stock portfolio and I don't purport to know any more than the average investor who is profitable.
Back in June 2000 I left a career in the military after serving thirteen years. I reached a point in my life when I decided that I would make my fortune in real estate and the stock market. I started out accumulating my investment wealth through buying and holding real estate. I purchased seven properties in all. Not bad back then especially considering I purchased them all on leveraged credit.
The 'no-money-down' late-night television infomercials enjoyed plenty of air play and I must admit I attended my fair share of workshops trying to understand the game overall. I read a lot of real estate investment books only to realize that many of the rules had changed regarding assuming mortgages, obtaining distressed properties, foreclosures and so on. I found ways to be a bit more creative in the way I found sellers willing to carry second mortgages. As an example of my creativity I used the seller carry back as my down payment to purchase no-money-down.
I'm only telling you this because you can hardly get away with that these days with the current condition of the financial markets. In those days financial institutions were a little more lenient with loan requirements especially when the borrower had a stable income, no debt and excellent credit. My point, however, is to simply share one of the ways I got into the game. Seven properties were plenty to handle as a second job ~ I was still in the military at the time.
Develop the discipline and habit to think independently
Be skeptical of investment advice from newsletters or blogs
Don't be influenced by chat rooms or the media
Beware of analyst's coverage and their opinion of stocks
Become a specialist not a generalist and don't diversify
Buy the rumor and sell the fact
Trade around significant company events
The media overall is nothing but a huge hype machine intended to make the public ebb and flow with emotion. One rule of thumb I use to accumulate my investment wealth is to remember ~ the crowd is usually wrong. Whatever you observe the crowd doing you will make significant money by doing the exact opposite. This may sound simple but it's really difficult when you don't develop a strong mind to think independently from how the crowd thinks and acts. Crowd behavior can become so strong that you can get sucked in every time ... believe me as I write this I still struggle at times to tune out the noise of the crowd.
Whenever you see the "market" down and the crowd running fearful and scared, you should be looking for buying opportunities. Look for companies you are familiar with, a company that you understand what they do to make their money. Make sure the company is well known. You'll know if it's well known if it trades over one million shares in average volume.
Keep in mind even the best of companies who are positioned well financially and are stable get taken down by fearful crowds.
Speaking of fear ... in my experience I have found in both markets, real estate and the stock market the two emotions that govern are 'Fear' & 'Greed'. Further I discovered Fear to be a stronger emotion than Greed. Therefore, prices accelerate a lot stronger and harder to the downside than they do while going up.
"The trend is your friend" is one of the rules of thumb you will internalize while on your journey towards profitable trading. Click below and learn about one of the tools that have proved invaluable to me and helps me identify significant trends. Check it out for yourself! Get your favorite stock symbols' Trend Analysis TODAY!