Successful Investors

So what makes a stock market investor successful? Sometimes it is just luck, such as those fortunate investors who stumble upon a great stock. For example, who would have known that Microsoft, a rival of the mighty IBM in the 1980s, would have become the world leader in computer operating systems and programs? Those people who stumbled upon Microsoft's stock twenty years ago realized great rewards. However, a truly successful investor develops rules of conduct, which complements their knowledge of the market. In this section, we shall discuss some of these rules.

Adapt
In essence, the market is a reflection of people's ideas and attitudes. And because the market is always changing, it constantly presents traders with new and unique challenges. The ability to adapt to changing market circumstances is just one of the many characteristics of a successful investor.

Stay Neutral
Being neutral when investing is vital. You should never fall in love with a stock. Nor should you invest with your emotions. For example, examine a potential trade with an objective eye and trust what the indicators are telling you (indicators do not possess emotions).

Keep a Trading Journal
Track your trades in a Trading Journal. Write them down and include those elements that helped and those that did not. Allow yourself to learn from your mistakes and your successes. (A Trading Journal is available for your use at the end of Volume 2.)

Focus on Strategies that Work
There are several proven, effective strategies for making money in the stock market (you will learn several from this program). You do not have to be an expert and know every strategy; therefore, identify those strategies that you are most comfortable with and use them.

Diversify
This is an extremely important principle in the stock market. Only invest a small portion of your investment portfolio into any one stock or security. Do not place all your eggs into one basket. If you do, they may all crack when that market goes down. Placing only 10% to 15% of your account into any single investment is a good rule to follow.