This is why you must paper trade first if you have never traded in the markets before. You cannot be a good trader without mastering the basics.
2. Never make the same mistake twice.
Though you should experiment a little bit when you paper trade, you should strive to never make the same mistake twice. You want paper trading to be of utility, not be a useless exercise.
3. Strive for perfection. You’ll never get there; perfection doesn’t exist for investor /trader but we can always do better.
Won’t accept a bear market as a reason that you’re not making money and will work even harder to try to earn you money, exhausting all investment possibilities.
4. Our job is not eight to five. You cannot be number one in the world and not put in extra hours.
Many traders claim that they believe in working smarter, not harder. That’s just a euphemism for the fact that they don’t want to work hard – ever. To be the best, you always have to work harder than everyone else. There are no shortcuts to this in any endeavor, whether in investing or in martial arts. If you’re lazy, you’re not going to get phenomenal returns in your portfolio.
5. Be a subject-matter expert in your field.
Divide knowledge responsibilities among their teams. Expertise in certain areas is nothing less than astounding. Every investor is expected to gain a specialized set of knowledge.
You should also gain some industry expertise knowledge. Whether you choose the alternative energy industry, the pharmaceutical industry, precious metals, oil and gas, it doesn’t matter. Just become an expert.
6. Train as you would fight.
Only against the U.S. Federal Reserve Chairman, the weakening U.S. dollar, and global inflation.
This rule only really applies to beginners. Those learning to trade stocks. When you start trading for real, your paper trading results will serve as a good proxy for how you will perform when you start using real money, but only if you paper trade as if you were using real money.
So experiment at first, but no longer for three months. Within this time, develop your buying and selling strategies and industry specific leanings. After three months, start paper trading as if you were using real money.
7. Think ahead and stay organized.
You will win if they stay just one step ahead of the enemy. But they aren’t satisfied with being just one step ahead. They want to be three, four, or five steps ahead of the enemy. In investing you’ll never win unless you are also at least one step ahead of the economy and ahead of the “thundering sheep herd "(for the mindless public masses).
The worst thing an investor could do is panic – and buy high and sell low. So you must adjust and adapt your game plan. And you can only do that by knowing exactly what you own and if the stocks are down just because of the worldwide global weakness in the markets or if they are down because they are terrible stocks and would have tanked anyway. You can’t win in the stock market just by thinking about today and reacting to what is happening now. The only way to win is to think ahead.
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