Bits of Wisdom for the Stock Trader

Trading is simple, but it ain't easy. If you want to stay in this business, leave "hope" at the door and stick to your stops. 

When you get into a trade, start looking for signs right away that you are wrong. If you see them, then get out before your stop is hit. Trading should be boring, like factory work. If there is one guarantee in trading, it is that "thrill seekers" get their accounts ground into parking meter money. 

Amateur traders turn into professional traders when they stop looking for the "next great technical indicator" and start controlling their risk on each trade. 

Professional traders only place a small portion of their assets into 1 position. Or if they take on a large position, then they strictly limit their risk to 1-2% of their current equity. Amateurs typically place a large portion of their assets into 1 position, and they give it "room to move" in case they are actually right. This type of situation creates emotions that ruin accounts, while professionals are able to make decisions and cut losses because they strictly define their risk.

Professional traders focus on limiting risk and protecting capital. Amateur traders focus on how much money they can make on each trade. Professionals always take money away from amateurs.