If you've ever wondered why most stock traders quit trading while others rake in millions of dollars, seemingly with Mr. Luck on their side, then pay very close attention... In just the 10 minutes it takes you to read this article, the "combination" will finally click, everything will fall into place... and after weeks, months or even years of frustration, you'll break away from all the lies and 'BS' by copying the exact strategies of million dollar traders. This "under the radar" stock trader will expose the absolute truth about techniques that create crazy profits for successful traders... even when they're relaxing on a 60ft yacht in the Bahamas! Let's begin. Losers come in all sizes (gender, age, race). It is easy to spot a loser based on how they think and what they say. If what I'm about to say sounds like yourself, use that as a sign to start learning a new way to approach the markets. It's My Broker's Fault Well off traders who still use a broker do so because they never really grew up and got off their mother's nipple. They were born with a silver spoon in their mouth. Any hardship they had in life, they knew was temporary because ultimately they would inherit wealth, power, and prestige from their parents. Their large amount of wealth is a crutch. They hire a broker because they are too afraid to make and then stand on their own decisions. They use people like pawns and are quick to blame them for their own short comings and failures. It's always someone elses fault with these type of people. If you lose money, you have a great excuse-it was your brokers fault for putting you in that dumb stock. In reality, a good broker is nothing more than a salesman. At best, a broker should be viewed as nothing more than a helper. People who look to a broker for guidance are insecure and do not have much trading success. To be a successful trader, you must accept total responsibility for your decisions and actions. It's The Guru's Fault Gurus always crash and burn. They have a shelf-life of about 10 years. Most are failed traders which is why they are trying to make money as a "guru". They've given up on trying to make money in the stock market. A so-called stock market teacher who does not trade is a fraud. Most people who listen to gurus lose money. Jim Cramer is an excellent example. All new traders should buy Jim Cramer's picks and then lose money. Only then can real learning begin. It takes a new trader less than a year to realize that most of Jim Cramer's picks have a win loss ratio of 50/50 which is about the same odds as flipping a coin. But people still listen to Cramer because they want someone else to blame when a trade goes wrong. Most people don't want to "lose face" with their wife, son, daughter, friend, and Cramer like gurus offer an excellent alternative: blame the guru. Until you realize that you are 100% responsible for the outcome of your trades, you will lose money. It's The Fault of the News It hurts when a sudden piece of bad news sinks your stock. It's the news fault. You are responsible for handling all the foreseen and unforeseen challenges that may pop up in PRs in the stock you are in. How did you handle the news? Most losers stay in a stock too long once an external news event takes place. Why didn't you sell when the news hit? Most company news is released on a regular schedule. If you trade a certain stock, you should know well in advance when that company releases its earnings and be prepared for any market reaction to the news. Sell half of your position before the coming announcement if your stock has spiked going into the earnings release. At the very least, you should tighten your stops in advance of an earnings announcement or any important news release. What about a totally unexpected piece of news like a stock offering to raise money which dilutes shares? That is an immediate sell if not the same day, then certainly the next morning right at market open. A trader friend of mine was hit with news of a 500 million share offering in his stock right before market close. His stock dropped 10% that day and in after hours trading. I asked him what he was going to do in the morning. He said that he was going to pray for a bounce and then sell into the bounce. I told him that if he wanted to pray, he needed to save that for his Sunday church service. "In the morning", I said, "sell immediately." He didn't listen. The stock fell another 20% the next day. He blamed his loss on the news. But was it really the news or was it how he responded to the news. Your profit thesis must include the possibility of a sudden adverse move caused by sudden events. You must have your stop in place, and the size of your trade must be such that you cannot get financially hurt in the case of a reversal. There are many risks waiting to surprise the guerilla trader—you alone are responsible for damage control. Hope/Prayer Will Save the Day The loser does nothing when his stock slowly goes against him. Bit by bit his shares drop in value. Each little drop causes his pain to grow. He prays/hopes that his stock will come back. He just needs to give his trade more time to work out. A winner accepts occasional losses and then moves on. Losers postpone taking losses and find themselves trapped in a stock while they hope/pray the stock will come back. Amateur traders think of trading like a lottery ticket. He waits for Mr. Luck to decide whether he wins or loses. Professional traders have a solid exit plan in place before even buying a stock. They then stick to that plan and don't rationalize why they must deviate from it. Rationalization is the devil of stock trading. For example, I knew a trader who bought a stock a $15 and put in a stop at $12. When the stock dropped to $12.50, he wanted to give it a little more room so he moved his stop down to $10. He just made a huge mistake by violating discipline. You do your most clear thinking BEFORE you put the trade on. As soon as money is at stake, you should never change your original plan. The only time you should move your stops is one way, into the direction of your trade. For example, let's say you are in at $15, with a stop at $12. The stock goes to $18. You may want to set your new stop at $15.75 to guarantee that you will not take a loss on this trade. If you are a day trader, you may want to set your stop at $17 to lock in quick profits should the stock reverse while still giving you the chance to ride the stock higher. In general, if you are long a stock, the more the stock goes up, the tighter you set your stop. Never turn a losing short term trade into an "investment" in order to give it more time and room to breathe. Never put off taking a loss. The first loss is the best loss. I hope you enjoyed this article and please feel free to leave your comments below. Thank you and happy improved trading. Lance Jepsen
President, GuerillaStockTrading.com
Your Trading Coach
(because everyone, even Tiger Woods, needs a coach)