Long term success does not come easy for stock market investors. You need to acquire specialized knowledge and follow sound, proven trading principles. This is the path to overall success in the markets.
The most important principle is proper money management. You must preserve your capital as much as possible. This means cutting your losses short. When the market goes against you, smart stock market investors get out with a small loss. Many legendary traders made their fortunes being right only about half the time. The secret is they always cut their losses short and let their profits run. Their winning positions were larger than the losing ones. It is important to understand the balance point between being too afraid and too aggressive.
Another important principle is to respect what the market is telling you. If you want to trade a stock that is in a major uptrend, only trade it from the long side. On the other hand, if a stock is in a major downtrend, sell it short, or do nothing at all. The market is telling you what to do, but you must be objective, and listen to what the market is telling you. Stock market investors who respect and listen to the market will be successful and maybe even make a fortune.
Concentrate on the process, and not the results. The results will then take care of themselves. Put as many factors as possible in your favor before ever taking a position in the market. Have the patience to wait for just the right trading opportunity, when the odds are firmly in your favor.
Stock market investors face many challenges when trading the markets. The intellectual challenge of understanding chart patterns and properly analyzing fundamental information. The biggest challenge of all is the psychological one. Many times to be successful, you must go against what is normal human nature.
A great way for stock market investors to become successful is to study market masters, past and present. Read their books, study their methods and principles. This includes Jesse Livermore, William J O’Neil and others. Then implement what you have learned into your own trading. You will most certainly improve your overall results by doing so.