We will assume that you are considering going into the stock market.Of course you have high expectations of acquiring a very significant return on your capital on which you intend to invest.

Hopefully it should also provide a far better return than what you would otherwise achieve by investing your money into managed funds (less risky than single stocks) or even possibly term deposits where your returns are guaranteed.

Well, how do you achieve such nice fat returns? The answer naturally is very simple. All you need to do is Buy low and sell high.If you can do that just about most of the time you will turn out to be a very successful profitable stock trader.

It sounds so very easy,but in reality it takes a bit more effort than just doing that.

But firstly what type of trader do you want to be? There are mainly two types but of course it is all a matter of degree as some traders have a bit of each type in their makeup.

We shall cover the first type of trader, the most prolific of all traders. Just answer these questions truthfully .I don't care if you don't as the only person you are fooling is yourself. Do not worry we are all guilty of that from time to time, myself included.

Do you listen to the financial news and do you do what exactly what everybody else is doing? Are you selling when the market sells? Are you buying when everybody else does? You hear there is a run on Gold or Uranium or whatever, and right NOW this is the time to buy in before you miss out! Does this sound familiar? It should, because this is happening every day in every stock market around the world.

If this sounds like you do not despair, you are in good company for at least 80 profit, so what are you going to do? Sell now, or wait until it is up 50 or 200 as I personally have a preset profit set. If and only if the stock is still trending upwards consistently, then and only then will I put off selling. But I always without fail, make sure a stop loss is set in place to lock in my profits.

You will hear traders say in chat rooms "I had that stock, I sold it when it was up 20 profit at least. How stupid I was I when I sold it!" If only! It could have just as easily gone the other way and you ended up penniless. Hindsight can be a wonderful thing if you can learn from the mistakes you make.

Next how much of the stock you should sell? All or nothing? Again this is really up to you. The situation that I like happens when I am trading a Penny dreadful. If the stock has made me 100%.(it does happen occasionally) I sell of exactly half, get my original investment back and that leaves me with a stock which has virtually cost me nothing, and I still keep an eye on it, let it go, and raise the stop losses when needed. Money for Jam!

Many traders are losing good money today because they are second guessing and are always trying to beat the market. If you are very new to this game and are NOT planning to spend much time on either research or teaching yourself then unfortunately the chances are you will lose your money. In fact I can guarantee that you will, because the odds are against you right from the very start.

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