Getting Trading Ideas

There is no shortage of ideas available over internet, stock market literatures blogs etc.

Technical analysis provides many ideas based on the movement of price and volume assuming that

what happens in the past will repeat in future. fundamental analysis does it by using the financial data.

But trading some idea with out really understanding it and proper pre-planning can be suicidal.

Following steps will help in you to increase the profitability and cut losses.

1) Validate the trading idea -Understand reason why you think the price is expected to move in your favor.

2) Back testing - Look into historical data and find out whether the the idea was successful in the past.

    Get historical data and automate this process and test in such a way that you simulate the exact way your           account will behave with real trading(Portfolio level back testing). This can take a lot of time, I have some testing running for few days, be patient. This will save you money.

3) Paper Trading - Many times real trading gives entirely different result from back testing results, do paper

    trading for sufficient period before you actually start trading a new idea

4) Control the risk - Decide how much of your portfolio, you want to risk in a trade.

5)Cut your losses - Ones you start a trade, 3 things can happen, price remain at current level, price moves according to your expectation or it moves against your expectation. Be prepared for all three outcomes before starting the trade and again be patient, separate your emotion from the trade.

6) Be creative, don't stick to one idea, trade different ideas at the same time. 

Here is what I am trading now

• Buy when there is an established uptrend
• Buy when there is a consolidation and it starts to move up after and uptrend
• Buy or sell when there is an expected trend change