Have a trading plan
One of the most common things written on trading is to have a plan and to stay disciplined to that plan. That means to consider the following before a trade:
- Where is the entry point and why?
- Where is the protective stop going to be placed?
- Where will you begin to make profits?
Knowing the answer to all 3 of those questions before you enter a trade will prevent you from having to make tough decisions as the market is moving.
Know your risk
This goes hand in hand with having a trading plan. Knowing how much you are willing to risk on any one particular trade is just as important as knowing how much you are willing to risk on trading in general. An account should always be opened with risk capital.
Keep the winner in you
Too many times beginning traders find themselves in the enviable situation of having a nice winner on the books. Sometimes those winner can be %75-50 of a particular account's value. And the truth is that markets don't go straight up or straight down. They fluctuate all the time. So if you have a winner on the books protect it
Trading in investing
Trading is a short to medium term thing. You enter a position with the expectation of exiting quickly. That can be anywhere from 5 minutes to 2 weeks depending on your strategy. The only thing matters is that you need to exit a position to turn it into cash
You will never sell the exact top of a market or buy the exact bottom of a market. Professional traders don't even attempt to do that. If it happens it is generally luck. If you have profits, TAKE THEM. You will always be able to reenter a new position. Tomorrow is another day. There are always other trades!