Can trading stocks make you rich?
Many people get rich through the stock market. You too can get rich trading stocks if you do what is necessary.
How to get rich trading stocks? Trading is very hard and stressful for some traders. But, on the other hand, if it isn’t it couldn’t be so possibly beneficial. Let’s see how to get rich trading stocks.
Can trading stocks make you rich?
In the long run, it is possible if you start to invest while you’re young, have long-term goals. But for that to achieve you’ll need a decent capital and have to add more money continuously. The good news is, you don’t need to be an expert before you start investing. But investing is much more, not just simply buying a stock. You want to know how to become rich by trading stocks. And the short answer is – yes. Here are several tricks about how to get rich trading stocks.
Why it’s possible to get rich trading stocks
First of all, it isn’t easy so you’ll need to recognize the difficulties. When you accept this fact you are ready to develop the skills necessary to overcome them. Keep in mind, trading isn’t a lottery game. Yes, you can find a lot of stories telling how some traders become rich overnight. They did it, that’s true but very rare. The real successes come from trading day after day. The possibility of losing is big but if you’re disciplined the reward will come. So, persistence is extremely important. That will be the first hint on how to get rich trading stocks.
Forget luck. Trading should be constant and systematic with strong risk management. Your utmost goal is to protect your trading capital and reduce the risk of trading in each trade.
What to do to get rich trading stocks?
You must have a focus on hot stocks. Pay attention to those that are hitting new highs. You must be ready for that. Follow and examine their patterns. Don’t waste your time to find some exotic one, just focus on those that are already raising. I suppose you have a trading plan, it is necessary. Stick with it and stay in the stock until it reaches a new high. Don’t pay attention to stocks that are dropping at this moment. When he stock hit the new high, sell it.
Short selling to get rich in trading stocks
You don’t need a bull market to get rich. This is a misconception. Try to recognize the opportunity for short selling. Trading isn’t investing, so you don’t need to hold a stock for years no matter how much you love it. You’re trading because you want to profit in a short time. Follow the example of day traders. Their earnings come from short selling.
What to do if you have a losing trade?
Cut your losses promptly and put your ego aside. Yes, you will have losing trades. But never try to sit at the corner and let your feelings overflow you. Losing trades are just the steps to success. Instead, when you face a setback, cut your losses quickly, and go back to the track. Do it immediately. Never sit on your failures. Look to the future straight. You have to put into the calculation losing trades. Just plan them. But plan to move on when it happens. Exit the losing trades on time and quickly enter the position on the new one. Keep your trading journal.
Take partial profits
Listen, there is no possibility to earn if you don’t take the profit. Take even partial profit. Also, take your profit quickly at the moment you’re sure there is a profit. This is very important. You have to know that the stock market is changing very fast. If you miss a chance to take the profit you’ll end up in losses. Take the profit any time you can. No matter how small it is. The point is to avoid losses. You’ll feel better even with small gains, much better than with losses. Your confidence will grow. That’s how to get rich trading stocks.
Use trading stocks app
This world is changing so fast and we all have to know how to benefit from that change. So, we all have to change our habits and old fashioned approaches. Individual traders have zero chances in the stock market if they never adopt some of the new technologies. Don’t let you be afraid of them. Trading apps are your friends. They can provide you to trade easier and smoothly. You can enter and exit the position on your phone. But before you use any of the present apps examine them, read reviews, go to forums, ask people, talk. Start to use the new app with a small amount to test it first.
Avoid illiquid stocks
Yes, I know, illiquid stocks make big promises but how much they can grow. Is there any uptrend? How to earn if the changes are modest? You need high traded stocks, not some lazy sleeper. If you want to earn a serious amount you’ll need to trade high liquid stocks. So, the point is not to believe in the stock’s fairy tales. Sometimes there will be a lot of hype and big promises around some stock. Try not to listen to them. Avoid that noise. Stay focused on the stock’s action. Examine the stock historical performance, how it actually was acting in a particular situation, what causes it to rise or drop. By examining this you’ll know what to expect in the future.
Well, not exactly, because the past performances will never guarantee future actions, but you’ll have an insight into stock nature. So, you’ll be able to make decisions with more accuracy.
Diversification and trading with leverage
Let me explain something. If you’re an investor, reasonable diversification is good. But if you want to get rich trading stocks and earn a lot, you should avoid diversification. Trade only one or two stocks and use not more than 30% of your investment at a time. That’s the way to earn millions by trading stocks. This is confirmed for so many times. You may think it is easy to stay away and not invest more money when the stock price is following an uptrend. No, it isn’t. But you must be disciplined. You have to stick to your trading plan and never go across it.
As I said, diversification is good for investors but for traders can be dangerous because you’ll have to be focused on price action. How can you do that if you have many stocks? You’ll simply fail.
Buy bottom, sell top isn’t always a right fit
This old mantra among beginner traders is canceled. I know you might believe I’m crazy but think. It is hard to take the maximum profits. Instead, choose to match the movement of the stock price. That doesn’t have to be the top and bottom. You can enter the trade in the middle and exit a bit below the top and take the main profits. In this approach, you’ll have reduced risk because you enter the trade in an uptrend and also exit while an uptrend is present. No, you’ll not miss the big profit. You’ll miss losses if you do so.
But you have to plan this. For long-term success in trading stocks, the trading plan is alpha and omega. Never enter the trade without a specific trading plan. Before you enter the position you must know what is a risk/reward ratio you expect from each trade. Stick to that no matter what others think or do. Never change your trading plan in the middle of the game. That’s how to get rich trading stocks.
Have a plan, plan your failures
Getting rich in the stock market can look like a discouraging task for some of you. But it hasn’t to be. Honestly, it is so easy to achieve if you follow these rules. If you have some doubts, if you don’t believe you can make money In the stock market, well, it’s more likely you’ll never do. But if you create a plan, plan and understand the setbacks, and have proper risk management you have great chances to get rich trading stocks. Moreover, you can become a millionaire.
To get rich trading stocks you must understand and adopt the idea that you will lose money on a regular basis. When you adopt that thought, you’ll be in positions to become successful at it. Never take the stock market for granted, always be on guard. Keep in mind that the stock market will steal your capital if you give it a chance. The odds of getting rich can be against you only if you fail to recognize the possibilities.