More than eight out of ten people regularly lose money in the stock market. However, there are some who regularly make money consistently at trading. The key to their success is making decisions to buy and sell without being influenced by the stock market fears and greed displayed by the masses.
Fear of losing money in the falling stock market and, therefore, selling their valuable portfolio short, or greedily rushing to buy when a stock is going up is the normal psychology of the masses. Both these methods can display spectacular gains or dramatic losses. Though this is a normal practice and logical too, the stock market experts trade differently! Practice and careful analysis have made them experts in the field of investing. Moreover, this practice and analysis has also helped them overcome fear and greed - the two evils of trading.
To emulate the experts, one can find plenty of trading tools on the internet. There are many online trading systems that allow you to practice stock market trading without risking real money. This way, you can also practice to keep your emotions under check! These tools help you in choosing stocks according to the market trend in real time, and also help in analysis of the technicalities of the stock market by studying the various patterns and charts of the stock. Various books are available to study the trends and learn the best entry and exit points. This system of practicing the stock market trading is also called real-time virtual trading. This system helps in learning the market in real time and can take weeks or months to evaluate your "trade" was fruitful or not.
The faster way to learn trading is by using the historical data and available historical charts. Comparing the historical charts of the stocks and the overall market trends at key points will teach you the behavior of the stock against the overall trend at any given time.
Using good analytical and charting software, you can use the charts and learn the various theories. You can also hide the forward bars and try and predict how the particular stock behaved. You can also compare many other stocks' behavior during that time and do deeper analysis. You can even check your emotions by pretending that you own a sizable position in the stock and then monitor your feelings at the highs and the lows of "your" stock, and whether you were able to control your emotions!
This way, you can educate yourself without risking real money. All these helps in overcoming fear and greed, and practice emotionless trading -- the way the experts trade!
The experts also focus on the present indications of the stock and concentrate on understanding what the stock is "doing" at the present moment, rather than worrying about its future course. They evaluate and reevaluate the current situation and get to a point in deciding whether to sell, hold, or buy that particular stock at that particular moment. The analysis also helps them learn what other important stocks are doing at that time. They continually ask themselves on how to minimize the losses, if any, or how to lock in gains, or whether to place a limit order, or exit with a profit, or even a small loss. Experts are dynamically thinking about other stocks too.
These stock market trading tools help you calm your nerves with virtual trading without risking real money, helps your decision making while simultaneously building your technical skills for the future stock exchange trading.
