The reason why some traders make money and some traders don't

To make money in the stock market you must be able to identify trends and patterns within individual stocks and within the overall stock market. Trading stocks is very much about capitalizing on timing. The successful investor knows when to buy and when to sell. But more importantly a good investor really knows what signals to look for that tells him or her the time to buy and what signals to look for that tells him or her the time to sell to sell. How to read the stock market is the crucial skill in the development of a successful stock trader.

Whenever you look at an individual stock it is a good idea to do some research as to the underlying fundamentals of the stock. Has the company reported a jump in earnings or has the company reported a loss. After you have good idea on the fundamentals of the stock, then you can start looking at whenever trend the stock is displaying. Stocks are usually trending upwards trending downwards or are trending sideways. Most traders like to go after a stock when there is a strong trend up. When a stock is trending up then you should shift most of your investment strategies to going long on the stock. Which is you buy the stock now with the intention to sell the stock later on at higher price.

Stock trading requires signals on both when to buy and when to cut your losses. Plenty of traders have made some good money in the stock market, only to have lost it again because they did not read the stock market correctly and they lost most of their profits. Even if the traders did not lose all of their profits, they lost more than they should have. So focus on developing your timing signal awareness skills. Because this is the meat and potatoes of stock trading. Good traders know what signals that give them the correct time to buy, at the same time they know the signals that tell them the correct time to sell to avoid a loss, or just lock in their profits.