Stock trading strategy - mind of a successful trader


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Stock trading tips on hot stocks to buy now, stock market strategy, picking hot stocks, picking penny stocks, and how to buy cheap stocks. From “How to Find a Home Run Stock” and “How to Pick Hot Reverse Merger Penny Stocks” and also “How the Shorts Raid Your Stock, Destroy Your Company and What to Do About It” all by John Lux.

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Stock trading strategy - mind of a successful trader

  1. 1. www.investing-performance.comStock Trading Tips -Mind of a Successful Trader
  2. 2. DisclaimerTrading stocks, especially low-priced stocks, is VERY risky.You are on your own, no warranties.Check with a qualified investment professional.Do not invest more than you can afford to lose.This is not investment advice.
  3. 3. www.investing-performance.comIn talking with people who want to learn how to trade with great profits, or who ask me to evaluatestocks for them, I notice that there is a difference in the mindset, in addition to the procedures that we use to evaluate trades.
  4. 4. This will focus on thedifference in the mindset thatlets you pick the best stocks, and not the stock scams.
  5. 5. First, the successful stock trader thinks only of the future.Stock traders, stock pickers, are in the business of prediction.
  6. 6. Those who invest successfully are not excited that the company has just made a big announcement - they want to find a company that is about to make a big announcement.
  7. 7. Thus, the old saying, “buy on the rumor, sell on the news.” Anticipate. Predict.
  8. 8. Or another old one, buy straw hats in January.You buy in advance of the demand if you want to take full advantage of the hottest stocks.
  9. 9. www.investing-performance.comIf the stock is trading in a dull, lackluster fashion, the question is will it go up? Most traders ignore such stocks because there is no "action" in them.
  10. 10. In fact, Wall Street is the onlybusiness where to get more buyers,you increase the price. In the retail business, if you are selling straw hats, you lower the price and announce a sale.
  11. 11. Stock manipulators, on the other hand, use increases in price and volume to getbuyers. If you are buying only the most active stocks, you are probably losing money.
  12. 12. www.investing-performance.comIf you are buying only those that hit new highs, you are probably losing money.
  13. 13. www.investing-performance.comOne of my favorite hunting grounds is the list of newlows (Note, however, I know that stocks move in trends and I do not get in front ofmoving trains that are going down.)
  14. 14. Second, I instinctively goagainst the crowd. You want to buy cheap and sell high, right?
  15. 15. www.investing-performance.comWell, stocks are cheap when nobody is buying, duh. And stocks are high when everyone is buying. Enough said.
  16. 16. www.investing-performance.comWhen I was telling people to buy the day after the crash in 1987,nobody wanted to listen but you could have bought blue chipsnames below almost below their cash per share and certainly below their liquidation value.
  17. 17. www.investing-performance.comI got on a financial radio show in Miami and told people "mortgage your houses and buy, you will never see these prices again!"
  18. 18. www.investing-performance.comOnly one person called and he didnt buy anything. Yet the market never saw these prices ever again.
  19. 19. www.investing-performance.comThere is an indicator out there called the consensus and it tellsyou what percentage of folks arebullish and bearish. We also note that contrarian investors are successful but not wildly so. There is more to learn.
  20. 20. www.investing-performance.comStart thinking of the future. What has happened now, what you know now, is only your starting point. What will happen next? Is there a trend or is this move the first leg of a reversal pattern?
  21. 21. Buy value and look for thecheap stocks that have a good future of ahead of them. Anticipate and predict.
  22. 22. www.investing-performance.comThird, the successful trader, while he wants to know everything before he buys,does not wait to know why to sell.
  23. 23. www.investing-performance.comIf the price declines sharply and suddenly, the up trend is broke and the trader does not know why, it means something iswrong and he sells as a knee-jerk reflex action.
  24. 24. He knows that about six weeks from now, when the price is much lower, he and the world will know, but right now thetrader knows that he must sell to save his skin.
  25. 25. Fourth, the successful trader is a professional and he is constantly looking to keep up with the latest techniques, to learn more, and he spares no effort in his quest formore knowledge. Yet he knows thatit is the basic principles that are the most powerful.
  26. 26. www.investing-performance.comHe focuses on the application of these principles by learning, learning, learning. He invests in learning, even knowing thatsome of this might be wasted. He is always looking for the latest improvement, the secrets of trading.
  27. 27. www.investing-performance.comFinally, the successful trader deals in action. He makes decisions. Once he has enough to make a decision, he acts or not.In the stock market, it is action that makes you money!
  28. 28. Discover more free or
  29. 29. www.investing-performance.comGet “How to Find a Home Run Stock” Or “How to Pick Hot Reverse Merger Penny Stocks” on
  30. 30. John Lux is a former OTC Market Maker, venturecapitalist, investment banker and attorney. Copyright ©John Lux 2011