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Every January, without fail, the TV news networks run endless stories on the best New Year's resolutions to make. You probably saw at least one today.
At the top of those lists is "make more money." And by February, at least 80% of people have already failed.
Now that's not because making more money is impossible to do… it's not.
The real reason is that they didn't set a specific goal – and specific and proven path to get there.
But you're not going to become a part of that statistic this year…
"Making More Money" in 2017 Boils Down to These Three Simple Steps…
- Identify Your Trading Type
Of the hundreds of technical tools at your fingertips today, none of them will be able to do one thing: control your trading behavior.
Your personality, your emotions, and your risk tolerance are unique. Even if you have memorized every form of technical analysis and studied Warren Buffet's every move, that doesn't mean you're going to have the same success. If you simply copy what a book or trader says to do and when to do it – without identifying your own trading type first – you're actually doing yourself (and your portfolio) more harm than good. Ultimately, you're doing nothing more than gambling and hoping for the best.
You need to know which type of trader you are (directional or non-directional) so that you can whittle down the strategies you should focus on for profits. Directional traders focus on price and time. On the flip side, if you're a non-directional trader, you're going to be looking at volatility first.
But before you even think about placing a trade, make sure you do this…
- Set Your Price and Time Targets – Every Time
A lot of technical indicators are constructed around moving averages that give you "buy and sell signals." In fact, we talked about one of those signals just last week. But what if, for example, you see a signal to sell before you've gotten any kind of real profit – and THEN take a loss? I think it's safe to say you wouldn't be too happy – and would probably think whatever indicator you used failed.
That's why it's best to establish your price and time targets first. You can do this easily by looking at a stock's past price moves and patterns and eyeballing the time frame in which you need the price moves to happen. Establishing the price at which you need a stock to move and the time frame in which it needs to move is extremely important because it prevents you from taking a trade costs too much and requires you to wait several years for profits.
Trust me, this will save you a lot of headaches in the future.
And once you've done that…
About the Author
Tom Gentile is one of the world's foremost authorities on stock, futures and options trading.
With more than 25 years' experience trading stocks, futures, and options, Tom's style of trading systems and strategies are designed to help individual investors propel themselves past 99 percent of the trading crowd.