{"id":13426,"date":"2010-09-28T11:23:46","date_gmt":"2010-09-28T15:23:46","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=13426"},"modified":"2010-09-28T11:23:46","modified_gmt":"2010-09-28T15:23:46","slug":"the-top-10-things-that-separate-pros-from-amateurs","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/09\/28\/the-top-10-things-that-separate-pros-from-amateurs\/","title":{"rendered":"The Top 10 Things That Separate Pros From Amateurs"},"content":{"rendered":"<p><a href=\"http:\/\/www.taipanpublishinggroup.com\/tpg\/smart-investing-daily\/smart-investing-092710.html\" target=\"_blank\"><span style=\"text-decoration: underline;\">The Top 10 Things That Separate Pros From Amateurs <\/span><\/a><\/p>\n<p><strong><span style=\"color: #888888;\">Jared Levy, Editor, Smart Investing Daily<\/span><\/strong><\/p>\n<p>I&#8217;ve just returned from our Global Opportunities Summit in Las Vegas and my mind is swirling with ideas for <em>Smart Investing Daily<\/em>.  I not only had the pleasure of meeting many of you, but also got the  chance to have some in-depth conversations with many of my fellow  editors from around the country.<\/p>\n<p>At the summit, I noticed that there were common threads that wove  their way through the minds of both the speakers and attendees.<\/p>\n<p>Our goal at Taipan Publishing Group is to not only help identify  potential investment opportunities, but close the gap between what has  made many professional traders successful and what the average investor  needs to know.<\/p>\n<p>I assembled 10 of the most important techniques and mantras you  should use to take your trading and investments to the next level.<\/p>\n<p>In coming issues, you can be sure I will take each one and more into great detail, but this should at least get you started.<\/p>\n<h3>No. 10: Hedge Your Bets\/Diversify<\/h3>\n<ul type=\"disc\">\n<li>If you are an options trader, you can use spreads to reduce your  investment&#8217;s exposure to the overall market. Some option spreads can not  only greatly reduce how volatile your account is, but they actually can  put the probability of success on your side.<\/li>\n<li>Diversify your investment portfolio not only with stocks in  different sectors, but also with BETA! Beta tells you how your stock  will typically react to the market. If all your <a title=\"Go to article: Using and Misusing the Beta Ratio\" href=\"http:\/\/stocks.about.com\/od\/evaluatingstocks\/a\/beta120904.htm\" target=\"_blank\">stocks have high betas<\/a>,  your account may be susceptible to just as much if not MORE volatility  than the market, even if you bought stocks in different sectors.<\/li>\n<\/ul>\n<div>\n<div>\n<blockquote><p><strong>Three little-known stocks that could turn $10,000 into a $1.2  million portfolio &#8212; get in before your friends or Wall Street spot  them<\/strong><\/p>\n<p>You could change your life with one calculation: buying these three  stocks. I don&#8217;t care if you\u2019ve lost money in the past; now is the time  that could correct all that. But you have to act now. Hitting that $1  million figure is indeed possible.<em><\/em><\/p>\n<p><strong>Get you free report from <em><a title=\"Learn more about New Growth Investor\" href=\"https:\/\/orders.taipanpublishinggroup.com\/TAI\/WTAIL904\/\" target=\"_blank\">New Growth Investor<\/a><\/em>.<\/strong><\/p><\/blockquote>\n<\/div>\n<\/div>\n<h3>No. 9: Plan Your Risk Ahead of the Trade<\/h3>\n<ul type=\"disc\">\n<li>Have a maximum downside dollar and\/or percentage risk spelled out ahead of your investment, not after the fact.<\/li>\n<li>Use stop-losses, put options or spreads to solidify your plan if you understand how to use them.<\/li>\n<li>Don&#8217;t exceed your comfort zone; this may cause irrational decisions  in your trade. In other words, don&#8217;t make your investments too large in  any one security.<\/li>\n<\/ul>\n<h3>No. 8: Be a Contrarian<\/h3>\n<ul type=\"disc\">\n<li>It&#8217;s usually better to buy on rumor, sell on news.<\/li>\n<li>By the time everyone is talking about it, it might be too late.<\/li>\n<li>Don&#8217;t be scared to <a title=\"Go to article: Outside the Box: The Key Characteristics of Stock and Bond Investing\" href=\"http:\/\/www.optionetics.com\/articles\/article.asp?id=20736&amp;source=financialcontent&amp;utm_source=financialcontent&amp;utm_medium=syndication\" target=\"_blank\">think &#8220;outside the box.&#8221;<\/a><\/li>\n<\/ul>\n<h3>No. 7: Sell or Protect While the Trend Is Still Strong<\/h3>\n<ul type=\"disc\">\n<li>It&#8217;s much easier to sell when a stock is rising in value vs. when it&#8217;s in free fall.<\/li>\n<li>Remember, insurance is cheaper before you have an accident, so if  you are an options trader, buy your puts when the market is complacent,  not panicking.<\/li>\n<li>Think of a climber who is 30 yards from the summit of a mountain and  runs out of oxygen. He may touch the top, but he won&#8217;t get down. This  is analogous to a stock that has been rallying for a long time and you  take no action to exit. While you may see the top in the stock, stocks  can change direction frequently, and most investors don&#8217;t get to sell  the highest high!<\/li>\n<\/ul>\n<h3>No. 6: Learn From Your Losses, NOT Only Your Profits<\/h3>\n<ul type=\"disc\">\n<li>Your losses can tell you just as much if not more about your trading personality.<\/li>\n<li>Sometimes just limiting losses can turn an unsuccessful trader into a  thriving one, or at the very least, allow you to live to trade another  day.<\/li>\n<\/ul>\n<h3>No. 5: Be Consistent in the Types of Issues You Trade<\/h3>\n<ul type=\"disc\">\n<li>Look for similarities in the behaviors of your securities; this will  help you to find the patterns you are looking for and will help  minimize errors. These attributes include ATR, Price, Volatility,  Sector, Chart Patterns.<\/li>\n<li>Remember that most professionals are specialists in a certain group of stocks or sectors.<\/li>\n<li>If it feels uncomfortable in a trade, it is probably not for you.<\/li>\n<\/ul>\n<p><em>(Investing doesn&#8217;t have to be complicated. Sign up for <\/em>Smart Investing Daily<em> and let me and my fellow editor Sara Nunnally simplify the stockmarket for you with our <a title=\"Sign up for Smart Investing Daily\" href=\"http:\/\/www.taipanpublishinggroup.com\/free-signups\/splash\/sid-video-su2.html\" target=\"_self\">easy-to-understand investment articles<\/a>.)<\/em><\/p>\n<h3>No. 4: Think Three Steps Ahead<\/h3>\n<ul type=\"disc\">\n<li>Have a game plan for all possible outcomes in a trade (most retail  investors just focus on the best outcome) and have alternatives for a  flat investment as well as one that begins to go against you!<\/li>\n<li>The analogy here is to pretend that you&#8217;re playing chess or poker;  in both games you are thinking about what you might have to do if your  opponent (the market) makes a move that puts you in danger. Investing is  no different.<\/li>\n<\/ul>\n<h3>No. 3: Trust Yourself<\/h3>\n<ul type=\"disc\">\n<li>Professionals are confident in their abilities and their plan.<\/li>\n<li>NO ONE knows exactly what you are thinking; only you can control your emotions.<\/li>\n<li>Your <a title=\"Go to article: What\u2019s Your Risk Tolerance?\" href=\"http:\/\/www.taipanpublishinggroup.com\/tpg\/investment-market-reports\/investing-risk-tolerance.html\" target=\"_self\">risk tolerance<\/a> and views on the trade are completely unique; therefore even though we  can offer trade ideas and theses, you must execute them in your own way  and use your individual money management to find how much of your  account you will invest.<\/li>\n<\/ul>\n<div>\n<div>\n<blockquote><p><strong>Learn How to Legally &#8220;Trick&#8221; a Mutual Fund Into Paying for Your Retirement<\/strong><\/p>\n<p>You could &#8220;siphon&#8221; thousands of dollars a month from the profits of the mutual fund industry.<em><\/em><\/p>\n<p><strong>Get all the details from <a title=\"Learn more about Safe Haven Investor\" href=\"https:\/\/orders.taipanpublishinggroup.com\/SHI\/WSHIL814\/\" target=\"_blank\"><em>Safe Haven Investor<\/em><\/a>.<\/strong><\/p><\/blockquote>\n<\/div>\n<\/div>\n<h3>No. 2: Be Adaptable, Yet Adept in Your Strategy<\/h3>\n<ul type=\"disc\">\n<li>Be able to admit you&#8217;re wrong and change direction when needed.<\/li>\n<li>Don&#8217;t apply a strategy you are NOT COMPLETELY comfortable with.<\/li>\n<\/ul>\n<h3>No. 1: Ask Questions<\/h3>\n<ul type=\"disc\">\n<li>If there is something you don&#8217;t know, always ask.<\/li>\n<li>If there is any piece of the trade that didn&#8217;t make sense, don&#8217;t  trade it with real money until you are able to quantify it. (Many  brokers offer paper trading platforms to test out new strategies.)<\/li>\n<li>The only stupid question is the one that is not asked.<\/li>\n<li>Professionals were not born that way; they too had to learn just like you!<\/li>\n<\/ul>\n<p>In summary, remember that at the end of the day, you are in control.  In trading and investing, just like in many other areas of your life,  it&#8217;s the little things that usually make the biggest difference.<\/p>\n<p>Taipan Publishing Group will give you the vehicles you need to  generate exceptional returns, but don&#8217;t forget that it is you behind the  wheel!<\/p>\n<p>Don&#8217;t forget to follow us on <span style=\"text-decoration: underline;\"><a title=\"Become a fan of Taipan Publishing Group on Facebook\" href=\"http:\/\/www.facebook.com\/pages\/Baltimore-MD\/Taipan-Publishing-Group\/220337511074\" target=\"_blank\">Facebook<\/a> <\/span>and <span style=\"text-decoration: underline;\"><a title=\"Follow Taipan_Trader on Twitter\" href=\"http:\/\/twitter.com\/taipan_trader\" target=\"_blank\">Twitter<\/a> <\/span>for the latest in financial market news, investment commentary and exclusive special promotions.<\/p>\n<p><strong><em>About the Author<\/em><\/strong><\/p>\n<p>Jared Levy is Co-Editor of <span style=\"text-decoration: underline;\"><em><a title=\"Sign up for Smart Investing Daily\" href=\"http:\/\/www.taipanpublishinggroup.com\/free-signups\/splash\/smart-investing-su.html\" target=\"_blank\">Smart Investing Daily<\/a><\/em><\/span>,  a free e-letter dedicated to guiding investors through the world of  finance in order to make smart investing decisions. His passion is  teaching the public how to successfully trade and invest while keeping  risk low.<\/p>\n<p>Jared has spent the past 15 years of his career in the finance and  options industry, working as a retail money manager, a floor specialist  for Fortune 1000 companies, and most recently a senior derivatives  strategist. He was one of the Philadelphia Stock Exchange&#8217;s  youngest-ever members to become a market maker on three major U.S.  exchanges.<\/p>\n<p>He has been featured in several industry publications and won an Emmy for his daily video &#8220;Trader Cast.&#8221; Jared serves as a CNBC <em>Fast Money<\/em> contributor and has appeared on Bloomberg, Fox Business, CNN Radio, <em>Wall Street Journal<\/em> radio and is regularly quoted by Reuters, <em>The Wall Street Journal<\/em> and Yahoo! Finance, among other publications.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you are an options trader, you can use spreads to reduce your investment&#8217;s exposure to the overall market. Some option spreads can not only greatly reduce how volatile your account is, but they actually can put the probability of success on your side&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-13426","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/13426","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=13426"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/13426\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=13426"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=13426"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=13426"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}