Do you sometimes get confused and wonder if you are making the correct trading decisions? Here are some simple rules that will help you trade smarter.

(1)
Never base your trades on a correlation to company news or fundamentals. It's a losing battle. The best indicator of a stock's potential price movement is the current price movement itself.

(2)
Always let the market, make your buying decisions for you. Allowing a stock's own price movement to trigger the purchase of a stock will be more accurate over the long run than your gut feeling of where you should buy. Control your entries through use of a buy-stop limit order or a limit order at the specified trigger price.

(3)
Be very selective about where you take your trades. After getting a buy signal, only go long on a stock just above its 5-day moving average and only short a stock just below its 5-day moving average.

(4)
Never trust a stock further than you can throw a grand piano. At no time should you own a stock and not have a standing Good-'til-Canceled sell order in place. i.e. Stop-Loss. Don't expose your account to catastrophic loss.

(5)
Never average down or add to a losing trade. Only add to a position when you have an open gain. In other words you only want to build positions in stocks that are moving powerfully in your favor.

(6)
Don't overtrade. Quit looking for your trades everyday and stop attempting to scan thousands of stocks for trades tomorrow. Methodically build your watch list like a spider builds its web - and let your trades come to you.

(7)
Don't over-diversify. This means don't trade more than one or two stocks at a time. Diversification leads to excess stress, management headaches, increased trading commissions and mediocre results. It also makes it harder to liquidate your positions quickly and go to cash when necessary.

(8)
Stop trying so hard to make money. Instead make your primary goal to get to a break-even position on each trade. As soon as you can, convert your protective stop-loss to a break-even stop-loss (Your Buy Price + the amount to cover your commissions) The market will do the rest for you.

(9)
Always trade the correct side of the market. Simply put - Trade with the trend. If a stock is in an uptrend - trade Long. If a stock is in a downtrend - trade Short (or don't trade). Avoid the bias of always thinking you can only make money if a stock goes up.

(10)
Never lose any of your original capital from trading. Always provide risk money before taking a trade based on your potential stop-loss exposure for a trade. If you start with $10,000 in your account you should have $10,000 in your account 6 months later, no matter how much you trade. If you don't have risk money to send in to your account - stop trading until you do.

-
Summary: Being a successful Short-Term Stock Trader requires adherence to a sensible regimented plan. Emotions, gut-feelings, wishful thinking or over-analysis have no part in attaining profitability in the markets.

Protect your original capital at all costs and take your time... the stock market will be here tomorrow.

The Stock Signal pro software is loaded with great signals and the in depth data to let you know you are making the right trading decision. To get more information you can visit the site

I am sure you'll like the software and the signals.

Until Next Time...

Best wishes and Good Investing,
Bill McKinley & Doug Newberry
The Investing Systems Network