Here are 10 trading tips from UK born self made multi-millionaire trader and entrepreneur Vince Stanzione.
1. You Can Make Money in All Market Conditions
- You too can profit from markets, shares, currencies when they fall in price (short sell), rise in price (long buy) and or even trade sideways (Range Trades).
2. Start Small and Build Up
- Compounding interest is the greatest mathematical discovery of all time – Albert Einstein.
3. Diversify – Don’t Put All Your Eggs in One Basket
- You can trade numerous financial products such as commodities, currencies, stocks and bonds all from one account, yet most traders stick to one or two markets – normal their home countries.
4. Know Your Personality and Trading Style
- His style is a trend trader rather than a day trader, Vince is not glued to a screen all day long and only checks prices at the end of the day and on some trades only once a week. Being glued to a screen for 14 hours a day will send you crazy.
5. Money Management is the Key for Survival
- No matter how sure you are that the market will crash or XYZ is going to soar in price, make your first trade a small one, and then, if you are correct, add more to that trade. Don’t put all your money on one trade. It’s amazing how many people put all their life savings into Bernie Madoff giant Ponzi Scheme. Spread your risk, its basic common sense.
6. Cut Losses Short and Let Your Winners Run
- Everyone tells you this, but few can do it. Trading comes down to psychology and everyone wants to win and no likes to be wrong or be classed as a loser. Many people trading is about the system and the mechanics, the truth is 80% of trading is psychology. The problem is when people are holding losing trades they don’t want to admit their wrong.
7. Treat Financial Trading as a Business
- Keep records of your trades, invest time and money to learn to trade and continue to update your skills. It is a never-ending learning process. You should not be trading for fun, excitement or to impress your friends. Vince Stanzione has 25 years trading experience and is still learning new things every day.
8. Don’t Get Carried Away by Technology
- Technology has done a lot of great things including bringing down the cost of trading. It is easy to get blown away by all the great software, online trading, real time data, charts, and business channels. The truth is, less is more.
9. The Crowd and Media is Normally Wrong
- Some of the best times to buy is when the crowd is terrified and the headlines are all doom and gloom. Warren Buffett Quote “Be fearful when others are greedy and be greedy when others are fearful”. If everyone is bullish on them the market has no other way to go but down. Be aware, stock market crashes do not start when everyone expects them.
10. Don’t Feel You Have to Trade All the Time
- Only gamblers bet on markets every single day. Some time the best trades are the ones you don’t make. Trading can become addictive both for losing traders who want to make back their losses and winning traders that are on a roll.