Best Trading Practices

Best Trading Practices

By
www.CandlestickForums.com

Profitable stock trading over the long
term does not come from luck.


It does not come from stock tips.


Profitable stock trading is the result of
applying the best trading practices to
stock trading.


Profits come from using the best trading
practices day in and day out for weeks,
months, and years.


Best trading practices include technical
analysis of stocks with profitable trading
tools like Candlestick analysis as well
routine fundamental analysis to identify
a stock’s margin of safety and intrinsic
stock value.


Best trading practices may vary from
stock trader to stock trader, depending
upon whether the trader is seeking
profits


in options trading, scalping profits from
movements in stock price, or employing
other trading strategies.


No matter what strategy and tactics
traders choose to employ,


best trading practices will include the
routine review of trading results in order
to identify what works and what does
not.


Profit comes from a sound trading
strategy and greater profit comes from a
continuously improved trading strategy.


Because stock price patterns repeat
themselves the alert trader using
technical analysis tools like Candlestick
pattern formations can profitably
anticipate changes in stock prices.


The underlying reasons for why stock
price patterns develop vary according to
market conditions.


Part of a pattern will be due to stock
fundamentals and part will be due to
market reaction.


The technical trader will always be wise
to be aware of the fundamentals driving
a stock price.


However, his best trading practices will
typically revolve around trading
according to technical analysis of
Candlestick patterns.


These easy to recognize stock trading
signals have been around for centuries,
having evolved in commodities trading
of rice in ancient Japan.


These representations of stock price
patterns are excellent predictors of
market trends as well as market reversal.


They are equally useful in trading
futures, commodities, stocks, options,
and Forex.


Although there are best trading practices
applicable to direct stock trading,
options trading, or futures trading there
are also best trading practices


principles that apply to changing tactics
as market conditions vary. For example,


a trader may find profits in scalping in a
market that is in an upswing but has a
fair amount of stock volatility.


However, if the volatility becomes
extreme the trader may switch to
options trading in order


to reduce investment risk while still
using Candlestick chart analysis to
predict price movement and gain profits.


Using strategies such as a long straddle
the trader can buy both a call and a put
on the same stock


with the same options expiration date.


In such a way he will profit if the stock
goes up or down and will limit his risk to
the price of there premiums paid.


A trader’s best trading practices will be
those that work the best for him.


Taking time to learn about individual
stocks or about new stock trading tactics
is a basic necessity for successful
trading.


Learning how to trade individual stocks
while still maintaining a broader view of
the stock market is one of the best
trading practices as it will continually
help the trader find the next


profitable trading opportunity even as
he is executing trades on the current
one. Because none of us is perfect we all
make mistakes.


It is through the review of trading results
that traders learn and continually
improve trading profits.


Best Trading Practices

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