Stock Selection is Critical to Success
Since Stock selection is critical to success I look at the IBD 50 and New America section of Investors Business daily to get my ideas. However managing risk with a proper mindset is what separates failure and success. Managing risk means taking trades with good risk/reward potentials. You can pick the best companies, but if you manage the trade poorly or risk too much on a trade you will end up losing money. This will effect you both psychologically and financially. The key is to develop a trading plan and build consistency. Traders who do well consistently and stand the test of time, are those who understand how to put their money in a good risk/reward position. They’re not concerned with winning all the time, rather making more on winners than they lose on situations that don’t work out. They accept their losses simply as a part of the reality of trading. It is not about being right. It is all about trying to compound money over long periods of time and keeping losses small.
Past performance is not indicative of future performance