Viph,Congrats on making some nice (paper) profits straight off...

Viph,

Congrats on making some nice (paper) profits straight off the bat.

Now be very careful not to get complacent. Having a few wins straight up is a recipe for future disaster. I don't want to sound like a big party-pooper, but brace yourself for a loss in the near future. Don't be surprised when it happens as it WILL happen.

Make sure you have sound money management techniques and a sound risk management strategy. Limit your losses. I use Elder's strategy of 2% of trading account size at risk per trade (maximum) and no more than 6% of trading account size at risk at any time. If I lose 6% in a calendar month, I pull up stumps until next month because I am not making sound judgements or the market is telling me that it is one step ahead and is greedy for more of my money.

Stop-losses and trailing stops are your friend. A big trap for new traders (and some not-so-new) is to hold on to positions too long -- either by eroding profits or by letting it go into the red too far and hoping for it to break even. Hoping for a stock to come back is poisonous as it ties up your cash, cash that can be used for more lucrative trades.

I haven't been in this game too long, I started in Oct 2008; a great time to get robbed by the market. But having copped the spanking straight-up, it made me realise that I have to get smart real quick or I won't be around much longer. Hopefully this won't happen to you.

Know when to take money off the table, know when to cut your losses. Anyone can buy, it takes balls to sell (at a loss or a profit). Don't try to catch the top or the bottom of the market; nobody likes a bottom-picker. :)

Keep a trading diary and learn from your successes and mistakes.

Cheers,

A.