What’s The Best Way To Get An Education In The Stock Market?

It is often said that you pay for your stock market education, one way or another. Unfortunately, most traders or investors tend to jump in without the right education, so they end up paying for it through big capital losses. I know I did…

A much smarter way to approach your career in trading or investing is to think of yourself as an apprentice – learn the terminology, read books, educate yourself, start small and build a system that is consistent with your goals and abilities.

Having access to quality data is also a key component of a successful trading plan – the right stock picking software can make life much easier for the DIY investor. There are literally hundred s of different software products on the market – most are legitimate but some are marketed by people who are only interested in selling you a product rather than giving you a tool that truly matches your needs.

There are also software products out there that are “black box” products. The term “Black Box” refers to software that claims to apply a set of trading rules to current market data, then spits out recommendations (or even performs the trades for you!!) There are a number of pitfalls relating to the use of Black Box systems:

* The trading Rules are usually not fully disclosed or customized for your needs.

* Often, the results advertised are from a trading system that has been optimized. It is a relatively easy process to optimize variables in any trading system to give a fantastic return profile. The problem is that there is no guarantee that those same variables will continue to work into the future. I have tested many black box strategies, and quite a number of them have been optimized for the best historical results possible whilst managing to underperform as they are applied in real time.

The importance of investing in the correct Stock Picking Software for your particular needs cannot be overstated – couple solid and tested rules with the right software and you are well on the road to success as a trader.

Only once you have spent your apprenticeship learning about trading, should you take the next step and actually commit cash to the market. But don’t start trading with real money – start with paper money for three months before even considering using your hard earned cash.

As part of your apprenticeship you will have learnt the skills needed to establish a trading plan. Triggers to buy and triggers to sell, as well as a sound money management plan are all part of your plan.

Watch your system and assess each trade against your trading plan. Make sure that the decisions you have made (on paper) are consistent with your plan, and that your emotions did not interfere. Don’t worry if some of your trades lost money – that’s the nature of the beast. It is more important that you follow the rules, no matter what.

A good trade is a trade that followed the rules – regardless if the trade made money of not. This is by far the biggest mistake most novice traders make – they focus on the money, where they should be focussed on how well they stuck to their rules.

Some people trade the market for a hobby, some to keep themselves busy in retirement, and some to make enough money so they don’t have to work anymore. Trading can be very rewarding, but it is vital to have a system – education and the right Stock Picking Software are the two most vital components of your system.

Dream big and reach for the skies – don’t let greed and ignorance cost you money!

Shaun Bruce is a highly experienced Stock Market Trader, and has managed up to $100m professionally for clients for many years. http://stockpickingsoftwarenet.com/

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