Go With The Trend In Share Market

One of the most useful skills that any trader can develop is the ability to identify a trend in share market

. If you can identify a share market in an uptrend and enter a long position or identify share market in a downtrend and enter a short position, you have the potential to make a great deal of money in stock market. Too many traders spend all of their time trying to "predict "what will happen next, rather than simply focusing on answering the question "what is the trend right now in stock market?" The fascination with predictions is understandable. If you could predict today where a given stick market will go tomorrow with any consistency you would be rich beyond your wildest dreams. Unfortunately this desire is just that, a dream. The heart of the problem seems to be that there are so many people making so many predictions that the nave trader almost can"t help but to think, "Well there must be something to it. These guys on TV can"t all be wrong can they?" In fact they can, just not all at once. And therein lies the fascination with predictions.

If someone makes enough predictions eventually he may get one right. If a stock market prognosticator on TV gets a prediction right he is likely to be sought out for more predictions for a fairly long period of time, regardless of how many of his subsequent predictions actually fail to pan out. Expecting to trade profitably in the long run by latching onto somebody"s predictions or by relying on your own is simply an exercise in hope. Successful traders learn that the ability to identify the current trend in stock market is far more useful than a thousand predictions.

For now simply note that the effectiveness with which you cut your losses in share market on trades gone bad will probably have more effect on your success or failure as a trader than Any other single factor.

by: Steve

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