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Stock_Trading_-_An_Introduction_To_Stock_Trading_Systems___Strategies

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					Stock Trading - An Introduction To Stock Trading Systems & Strategies

Word Count:
655

Summary:
A lot of stock traders will tell you that a stock trading strategy is
very often said to be the same as a stock trading system that is designed
to be used and traded in the stock market. But a stock trading strategy
does involve a complete system that includes not only entry and exit
rules, but stock selection, risk control and money management. For the
technical stock trader, the technical approach to a stock trading
strategy is based mainly on price action. The "bottom-u...


Keywords:
stock trading,day trading,stocks,stock market,investing


Article Body:
A lot of stock traders will tell you that a stock trading strategy is
very often said to be the same as a stock trading system that is designed
to be used and traded in the stock market. But a stock trading strategy
does involve a complete system that includes not only entry and exit
rules, but stock selection, risk control and money management. For the
technical stock trader, the technical approach to a stock trading
strategy is based mainly on price action. The "bottom-up" stock trading
strategy is the most popular fundamental method employed by analysts.
You should always remember that a good stock trading strategy is both
simple and practical. Once the set of rules and guidelines that make the
overall stock trading strategy have been identified and followed by a
stock trader, the trader must remember to remain open-minded so that the
trading strategy can be fine tuned and adjusted to new conditions in the
stock market.

When trading stocks using technical analysis, your trading plan will
specify the conditions and requirements for entering and exiting trades.
A good stock trading strategy will specify the optimum number of shares
to be trade at a given time. Money management is at the heart of a good
stock trading strategy. Stock traders who use a good solid stock trading
strategy know and understand that money management is the absolute key to
continued growth in their trading account. For this reason the money
management component of a stock trading system has often been called "the
golden rule to stock trading".

No matter which stock trading strategies you use and trade remember to:
stay unemotional and never invest with money you need for rent, the
mortgage, bills, or food. By analyzing your habits and behaviors, you
can greatly improve your stock trading strategy. Poor stock trading
strategy behaviors are usually caused by uncontrolled emotional
reactions, while others are just simply the result of bad stock trading
habits. Your trading goal is to make your stock trading strategy
systematic, logical and habitual at all times. By studying and looking
closely at market conditions to determine the current trend for the
market, a successful trader is then able to prepare the best stock
trading strategy to be used for the following day. Armed with this market
information and his trading plan in hand, the trader is less likely to be
influenced by uncontrolled emotions. By being completely aware of your
trading and by continually working to improve your stock trading
strategy, you will soon develop and find the set of behaviors that will
make trading success a habit for you.

Stock screening is a basic stock trading strategy and tool that involves
the trader screening the entire universe of securities for potentially
favorable stocks for trading. Some traders like to use moving averages in
their stock screening. For example, the trader may be looking for stocks
that are in an uptrend and are above their 200 day and 50 day moving
averages. The use of moving averages in a trading strategy is very simple
and this technique is most suited to markets and stocks which trend well.
While other stock traders look for stocks that are ready to breakout from
a pullback.

A word about Market Equilibrium follows. It is said to be obtained when
the market price of a stock or security represents the average intrinsic
estimates of all traders and investors. While the term Market Efficiency
means that the more efficient the market is, then the greater the degree
that stock or security price reflect all the information available which
may influence the price of the stock or security.

If your stock trading strategy is not suited to short-term market
conditions; you should quickly adapt your strategy, and if necessary, do
not trade. Short term trading combined with long term stock investing
should be part of your trading plan if you want to build wealth while
trading stocks.

				
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