It is NOT some get rich quick scheme or trying to find the next small cap stock that will go up 1000%.

It is overcoming your psychology and mastering the mental aspect of it. These 7 deadly trading sins are the threats to all traders. Once you can overcome these consistently, you will be well on your way to successful stock trading.

Over the next 7 days, we will be breaking down all 7 of these sins in detail and teach you how to combat these destructive tendencies. Here are the 7 sins of trading:

1. Revenge Trading

Revenge trading is the easiest way to turn a normal red day into an account blow up. Revenge trading occurs after you have had one or several losing trades, and you start to get emotional. You want to make back the money you just lost, so you start forcing trades on subpar setups. What happens after is that you end up losing even more money, you become even more emotional, and you start to spiral out of control.

2. Gambling

It is very easy to treat trading like gambling. Gambling is addicting by nature, and many new and inexperienced traders fall victim to this addiction. Just like in a casino, it is possible to make money in the stock market without much effort. But you will not make money consistently, and will end up losing money in the long run. The only way you can make money in the stock market is by trading a proven system with an edge. Doing anything other than this is just pure gambling, and will result in you losing all of your money.

3. Emotional Attachment

Emotional attachment in trading will prevent you from making rational decisions. Emotions cloud your judgement, and do not allow you to view market information objectively. Emotional attachment to stocks causes you not to buy and sell at the right times. Traders who get emotionally attached to stocks they own often turn into bag holders, as their emotions prevent them from respecting price action.

4. Slothfulness

The stock market is mechanism of moving money from the lazy and unprepared to the patient and hard working. Since the stock market is random, it is possible to make money buying and selling randomly without doing any technical or fundamental analysis. However you will not keep the money you make, and will end up losing money in the long run like most people who try to trade for a living. You are going up against some of the smartest and richest people in the world when you trade.   

5. FOMO

Fear of missing out haunts traders of all experience levels. There is nothing worse than missing a 20% move in a stock that was on the top of your watchlist. This often causes traders to chase and buy way too high. Traders will often hastily jump in the next stock that moves with the expectation that it will make a monster move. The stock ends up just being a subpar setup, they lose money, and they become even more emotional.  

6. Fear

Scared money does not make money in the stock market. Fear manifests itself in many different forms in trading. You cannot let the fear of losing money deter you from making a trade. You cannot let the fear of a winner turning into a loser cause you to take profits too soon. In trading, you have to risk money to make money. If you’re afraid to lose the money you are risking, you are likely trading too much size.

7. Ego

You cannot let your ego get in the way of taking a loss. Losing traders will believe so strongly in their trade thesis, they won’t obey their stop loss because they don’t want to admit they were wrong. Stubbornness is the number one cause of account blow ups. You have to put your ego aside when you participate in the stock market. No one wins 100% of the time, and losing trades are inevitable. Do not let your ego get in the way of your ability to make rational trading decisions. Care more about making and keeping your money than being right.

Free Webinar 

We are doing a free webclass on December 17th where we will go over all of the 7 sins in even more detail, show exactly how to overcome these and, build a bulletproof mindset. Mark it on your calendar and join us live.

The post The 7 Deadly Trading Sins Series appeared first on Bulls on Wall Street.

We have thrown a lot of information at you the past couple weeks. Now that you have a foundation of the basics of trading stocks, let’s get into the specific trading style we use at BOWS. We will give you an overview of our style in this article, and we will talk about how we find the stocks we trade, the characteristics of the stocks we trade, and my specific style of trading.

How I Find The Stocks I Trade

I use a trade ideas scanner to find the best stocks to trade. Every morning I look at all the stocks that are gapping up 4% more, and stocks that are gapping down 4% or less. I will filter these stocks gapping up and down by volume, float, and sector. The night before a trading session I will run this scan to see what stocks moved during the trading day, and keep certain stocks on watch for the next trading day to see if they will have follow through momentum. If you are interested in learning more about the scans we use, check out this article here for a complete overview of the scans we use on Trade Ideas.

Characteristics of The Stocks We Trade

The stocks I love to trade are volatile. Mainstream finance says that you should be afraid of volatility, but day traders like me are always on the hunt for volatility and range. Volatile stocks are the stocks that can give you 5%-10% returns (sometimes more) in just minutes. The stocks that are the most explosive are low float, have high relative volume, are gapping up or down with a news catalyst, and have a clean daily chart.

A stock’s float is how many shares of the stock is available to trade to public investors. A stock that has a low float, defined as 100 million shares or less, is more likely to make big moves. It is simple supply and demand.

A clean daily chart for a stock has no daily resistance near your potential entry spot. To the short side, you’re looking for daily charts with no nearby support. Ideally, you’re also away from all the major moving averages, as they can be a reason for your stock to stop going in your favor.  

My Style of Trading Stocks

As mentioned above, I am primarily a day trader who trades momentum stocks. I usually just trade for the just first 2 hours of the trading day. After 11:30 AM, the momentum and volume of stocks decrease significantly, and the patterns that I look for in stocks have tend to have worse follow through.

I like to scale in and out of my positions. This means I don’t just buy and sell all of my shares at once. I like to sometimes buy half of my planned position size at first, and then buy the other half once the trend is confirmed. I also like to sell half of my position when I am up on my trade to lock in profits, and then let the other half of my position ride for a bigger move.   

If trading volatile stocks is something that is not suited to your time commitment or personality, swing trading is a style of trading you should look into. Paul Singh, my former mentor, teaches BOWS students how to swing trade, which involves trading momentum stocks on a bigger time frame. This means if you have a full time job and cannot be by a computer to day trade stocks, you can still participate in a stock’s movement. 

Sign Up For The Free 4-Day Live Course 

We will go into more depth on our style of trading in our free 4-day live course starting this Sunday. If you missed our last post of the Bulls Elite Series on how to align your trades on how to transition from a 9-5 job to trading stocks full time, you can check it out here.

Reserve your seat for the free 4-day live course here.

PS if you’re coming let us know on Facebook and share this event with your friends. Click here to join our Facebook event.

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The post The BOWS Method for Trading Stocks (Bulls Elite Series Day 13) appeared first on Bulls on Wall Street.