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The following perspective on (day) trading comes from my many years of experience of active day trading or being the moderator of one of the largest day trading chat rooms on the Internet.

One of the biggest problems I see with new traders (and even some old ones) has nothing to do with the software or the broker they are using. You have to know who to follow and who not to follow.

When I was trading I made a lot of good trades knowing who to follow and who not to follow. These basic decisions will determine the time and money you will have to commit.

Your trading plan should be on going, constantly evolving and eventually contain things like how many days, weeks, and hours you will need to trade to meet your goals.

The following perspective on (day) trading comes from my many years of experience of quick day trading or for the moderator of one of the largest day trading chat rooms on the Internet.

One of the problems I see with new traders (and even some old ones) has nothing to do with the software or the agent they are using. Nor is the problem a result of purchase too high or selling to low; or not having enough money. The problem isn't any of those things.

It has to do with not having a trading plan. A good trading plan will go a long way towards solving the problems mentioned above.

Ted Williams was once asked how he hit the sport so much modified then everyone else. He said he had no idea and that he just went up to the plate and swung at the ball. There has only been one Ted Williams and as great as he was at hitting a baseball, I don't think he would have made a great day trader with that approach. Most great hitters have an idea what they are going to do every time they step up to the plate. Traders need to know exactly what they expect every time they enter a trade.

Everyone should start out with a basilar trading plan and use it. As the old saying goes, "Plan your work and work your plan". However, you also have to be ready to be flexible. That has to be part of your planning. As Clint Eastwood said as his resolution in "Heartbreak Ridge", "You got to adjust, you got to learn to improvise. And if all else fails, you to learn to survive!" Traders that are not able to make adjustments, improvise and survive will experience their own Heartbreak Ridge.

Your trading plan can't be one where you simply figure you are just going to follow someone else. That may be one way to get a start and a bit of experience, and it can be a part of a much bigger overall plan. But it cannot start and end there. You have to learn to trade on your own so you don't incidentally follow someone off a cliff. You have to know who to follow and who not to follow.

When I was trading I made a lot of good trades knowing who to follow and who not to follow. Yet, in the long run, I do not place confidence in you can make a living doing that. The master problem in following other traders is virus too far back the trade inasmuch as you are "following" and not leading. I think each and every trader has to take rise the very best trader he can possibly be, on his own. He needs to get there as fast as he can. Following more experienced traders can be a means to this end and can help get you started, but it cannot be the end. This takes planning.

A uncluttered trading plan will take in your long-term goals and objectives as a trader. You'll have to decide if you want to try to make a coached out of trading, or just be a part time trader. Once you have decided this you can make other decisions such as how much money you would like to make at either full time or part time trading. Your money goals have to be realistic. They can't just be, "I want to make as much money as I can". These basilar decisions will determine the time and money you will have to commit.

Your trading plan should be on going, constantly evolving and eventually contain things like how many days, weeks, and hours you will need to trade to meet your goals. If it is as detailed as I think it should be, you would know how many trades per day and how much profit per trade you will have to average. Of course, these things will have to be developed over time and further to your plan as you go and as you gain more knowledge.

There are many excellent journal on learning to day trade. My favorites are found at http://www.TraderAide.com/books

No permission is needed to reproduce an unedited copy of this number as long the hereabout The subject tag is left in tact and included. We do request that we be informed of where it is posted and reciprocal links will be considered. Email floyd@sbmag.org.

Here’s some good stock analysis for you.

Whopper Investments and Oddball Stocks spar over net-net ADDvantage (AEY). Whopper Investments owns the stock. Oddball Stocks explains why it’s a pass.

And Andrew August at The Frog’s Kiss writes about Dreamworks (DWA). It’s a 14 page report. After reading his analysis, I emailed Andrew saying it was “the best analyst report I’ve ever read.”

I’ll say that here too.

This is the best analyst report I’ve ever read.

You’ll notice Andrew never puts an exact value on the stock. Which tells you something about good analysis.

A lot of value investing blogs and articles calculate intrinsic value for you. If you read Ben Graham and Warren Buffett – you’ll see they almost never do this.

Intrinsic value is a guess. Buying is the belief.

You don’t need to use a lot of math to prove exactly what something is worth. You just need to present a convincing case for buying it.

Talk to Geoff About Stock Analysis

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