Effective Trading

Few tips compliled to make a trader who is just beginning to trade to become profitable . ( compiled from books mags i followed most and i am very profitable due to them )
In order of importance :
a) Keep trading costs small ~ Stock trading is a zero sum game and in fact a negative sum game where the goverment and broker take a cut of the pie so keep that piece of pie as small as possible MEANS Keep things simple dont overtrade , trade with the trend mostly and make it a point to keep the risk reward ratio as small as possible .
b) Start with paper trading stocks .once u do that u will know whether you are really good ie where u stand exactly .Dont worry about theis bull run .or worry about missing out on the run ,there are plenty of opportunities and plenty of shares .Just find out where u stand first as far as trading talent and acumen is concerned .Dont loose all your money to become an expert by committing yourself while training so paper trade , to trade u need money to do so to do the actual thing .Loosing allof it while learning would leave you with no option but to paper trade when u are reasonabley trained. Start trading with stock and not the options and futures .Leave them well alone.
c) Time frames : the shorter the time frames the harder it is to make money .Not this extremely important sentence .Start with buy and hold approach in the beginning and use if u wish a weekly candle to triger signals.and prevent u from overtrading .
d ) Diversify : Note here , in any trending market if u are putting all your eggs in one basket and the basket is good then u can do so but not in a ranging market . Suppose u can buy only 100 shares of one company so u can afford to buy 10 comapnies .If u buy say 1000 shares of reliance u cant buy any other .well this strategy is good in a trending market and would make money lots , if u are doing position trading .Avoid such in a ranging market. U need to do this only for quality stocks .NEVER buy a penny stock ,even if they are trading at their yearly lows the cheap stock get cheaper and cheaper and then get bankrupt.
U ARE INVESTING NOT ONLY TO MAKE MONEY FOR YOURSELF " There is a much bigger credible issue and committment here , u are using your money to buy into honourable ,good and growth stories and companies whose managements increase productiveity of your country and do the country proud and also the contribute to taxes and employment , Investing in dubious companies for whatever reasons means ur resources are committed to generating corruption , chicanery ,and all sorts of hanky panky associated with generation of all thats not so good with the country in general. " The good companies have to be rewarded by better prices in the stock makets and by increaseing liquidity and the bad dubious companies should be driven out and not allowed to operate by drying up liquidity.Like any professional takes a pledge be he doctor , lwayer ,engineer etc when he joing the engineering college the trader should also take a pledge to keep well away from crap companies howso ever paying the trade may be ".
e) Industry strength ~ Churn your portfolio by using the industrial strength of your stocks there are always cyclicals and indusstries who generate periods of stenght and weakness .Note trading stocks near yearly lows is also dangerous.Trade on momentum , buying stocks near yearly highs especially on bull runs can be extremely paying .
f) Investment style : ~ one can trade using so many styles , chart patterns , statistics , algotithms , astrology , ellliot waves .None is superior to the other ,The chariot in the hands of the master charioteer is superior , No taxidriver can drive a mercedes as effectively as a chauffeur , but the taxidriver is extremely versatile wih the taxi and so is the chauffeur in the merc. Find the best appraoch that suits you and which u throughly understand .Make it simple .and make sure it is really makeing u money .No aproach can make u money all the time . Cut your losse sand ride profitable trade4s for maximum effect and use stops .Always use stops in trades .
Summary of above : Buy stocks within a third of the yearly high preferabley when they make new highs ,buy when it looks like the general industry is going to move up or about to ,risisng tide lifts all boats .In bull run never buy and avoid stocks which are below their half way levels for the year especially those that are at yearly lows.
ALWAYS USE STOP LOSS .iF U FEEL U ARE GOING TO BE STOPPED OUT CLOSE OUT YOUR POSITION THERE AND THEN AND POCKET THE MONEY EVEN AT A LOSS .If u are getting repeated stopped out then dont trade something is worntg either in your approach or even just for that day , funny things happen , maybe the market is acting different or signalling a reversal , better to be in cash. All of the above is for a BEGINNING ~TRADER not an investor .

Ref :::: Trading philosophy of Thomas Bulkowsky (encyclopedia of chart patterns ~though this is not written in the book )