A Black Woman's Guide to Successful Stock Trading

Building confidence as a stock trader takes education, time and patience. Knowledge is power, and that applies to making the most of your money through smart wealth-building strategies.

Here are some key concepts to get you started on the path of successful stock trading.

Start with Understanding Finances

You may need to start with the basics. According to Ally, understanding what a stock is and how a bond works is a good start. You will need to keep learning until you create a trading strategy that you’re comfortable with.

Once you have a strategy, it’s time to dig down into that trading strategy. Analyze the companies you want to follow to determine the short-term and long-term plans of the leaders of that business.

If they’ve had a good run, are they planning to expand or sell out? Either of those choices will impact the price of the stock, and your actions determine the profit you’ll make on the stock.

Create a Success-Oriented Mentality

The stock market is a huge conglomeration of data. It’s important to determine what form of trading you want to do, which industries you want to study and follow and how you will fund your trades.

In addition to learning what you need to know to start, you will need to have enough knowledge to shut down any desire to trade based on emotions.

As Steven Dux says, acting on emotion and comparing your success (or lack of it) to others are major problems that people involved in day trading experience that can lead to failure if left unchecked.

Also, it’s normal for the market to fluctuate, so keep that in mind when you’re tempted to respond out of fear from an unexpected change in your stock’s value.

It’s important to get uncomfortable enough to push yourself and to keep going, no matter what.

Determine Your Risk Tolerance

Market volatility is where you make your money as a day trader. However, market volatility can be risky if your action is poorly timed.

One of the most important things to understand is that you will face losses on a daily basis. In addition to studying your chosen field or industry, you must determine your max loss before you make your first trade. This takes emotions and knee-jerk reactions out of the trading process.

Day trading takes diligent study and steady nerves. However, with the right training and the ability to take a loss and move forward, you can build a day-trading strategy for income growth and wealth-building over time.

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