| Success in the stock market can come from a | | | | factors in your system, since so many of the other |
| variety of methods. There are short sellers, buy and | | | | factors hinge on account size. It is tough to get |
| hold folks, short-term investors, trend followers, | | | | started in the stock market with a very small |
| contrarian investors, and a plethora of other methods | | | | account balance. But when you are dealing with |
| of investing. You can get into the market with a lot | | | | millions of dollars instead of tens of thousands of |
| of money, or a little money. You can trade daily, | | | | dollars, your strategy (as well as some of the rules) |
| invest consistently, or just drop a big lump of cash | | | | changes too. |
| into a mutual fund and hope for the best. Each of | | | | Your risk strategy will you how much to gamble on |
| these will work. Or not. | | | | any one position, and how much to gamble overall. |
| The secret to success in the stock market is not so | | | | Risk strategy is closely tied to account size. It is easy |
| much what you do, or even how much you invest. | | | | to risk 1/2% of a $1million dollar account. But if you |
| The secret to success in the stock market is | | | | only have a $5,000 account, that 1/2% is only $25 -- |
| developing a system that puts all the parts together. | | | | an amount far too small to trade. By putting all the |
| It is a combination of account size, risk strategies, | | | | pieces of a trading system into one written |
| position sizing, trading strategies, and consistency. To | | | | document -- your "Stock Market Business Plan" -- you |
| succeed in the market, you need to run your | | | | will have a blueprint in place to handle situations as |
| investing like you would your business. The size of | | | | they occur. Your business plan becomes your Stock |
| your investing account may be one of the biggest | | | | Market Trading System. |