How to be an online stock trader

You'll need the right tools, the right training and the right characteristics.

Firstly, you'll need to know when to hold on to your winners and when to ditch your losers. It's a well known fact that all successful professional traders have more losing trades than winners. That's right, more losing trades than winners. How is that? Simple, they sell losing trades quickly and hold on to winning trades to maximise their profits.

Secondly, disciplined trading is the key. Setting target exit prices before even entering a trade allows the successful trader to exit losing trades with only a small loss. Setting exit prices for winning trades is just as important. As the price of a stock rises you can set an exit price to take profits. You don't have to exit the trade at this point however. But you must move up your stop loss to lock in those profits and sell if the stock price falls back and hits your stop loss.

This can be summarised as follows:-

• Carefully planning trades by setting clear entry and exit points

• Ensuring losses are kept as low as possible with stop-loss triggers

• Protecting profits with trailing stops

• Exiting the position when stops are hit

OK, using this method won't get you in at the very bottom or out at the very top. Frankly, if you manage that you got lucky. But you will enter your trades on a rising trend and exit promptly if the market turns.

Bottom line, you'll still be in the game ready for the next opportunity. If you want be a professional stock trader the trick is to be disciplined and take those profits whilst minimising your losses.