How To Finally Start Profiting From Stock Market Trading

After 15 years of actively trading the stock market, here are 6 things I learned that will help you become a much more consistent and profitable trader.

1. Trade only fast-moving trends.

Our ability to profit from the stock market depends more on this decision than any other: ONLY trade long-term, fast-moving trends.

The results of your trading depend less on the stocks you trade and more on how quickly those stocks move from one price level to another.

Fast moving trends allow us to accumulate profits quickly. It’s as simple as that.

2. Only buy stocks that show promise.

The second most important decision is this: you must ONLY buy fundamentally sound stocks that are also trending upbecause they present you with the safest buying opportunities.

Buying a stock just because it’s going up may work well for you. For a moment.

However, by limiting your purchases to stocks that are fundamentally sound AND increasing in value, your potential to build a profitable trading business over the long term is multiplied many times over.

3. Use a proven input trigger.

Regardless of a stock’s fundamental outlook, or whether it is in an uptrend, always wait for a proven entry signal before committing your funds.

A candlestick chart signal, such as a bullish engulfing pattern, is a classic entry trigger and is something you can often rely on to enter uptrends.

4. Confirm the uptrend.

By drawing a 20-period SMA on your charts, you have a simple method of determining the trend.

Never buy or hold a stock that is trading below a 20 period simple MA. For clarity, I color mine GREEN in an uptrend and RED in a downtrend.

5. Take profit.

Trading profitably means that we must take profit. However, taking them too soon means that we can leave a significant amount of money on the table unnecessarily. To lock in profits, use what I call the “Thin Blue Line” indicator.

The Thin Blue Line indicator is created by drawing a blue 8-period exponential moving average on your charts.

SELL on a close below the 8-period exponential MA, even if your 20-period MA is still green and rising.

6. Buy high, sell high.

After selling on a close below the 8-period SMA, BUY again on a close above its 8-period SMA, AS LONG AS the stock remains above its UP 20-period SMA, which indicating that the trend continues upward.

This means that you can enter and exit a long-term trend multiple times, but you will be out of the market when that trend inevitably comes to an end.