Often, I receive requests from members of my stock market trading discussion group to give my views on technical analysis of stocks that they are watching. In the course of discussion, I discovered one common factor which separates the winning traders from the losing traders.

In general, both group of traders like to scan their lists of active stocks to uncover possible trading candidates. However, the traders in the winning group are specific about their trading, and have their entry and exit points well spelt out in a specific trading plan.

In their trading,they have precise entry and exit points...so that the trade is unemotional. After they have entered a trade, either they are correct and ride the trend or they are wrong and they exit with a loss that has been predetermined. There is nothing vague in their trading.

In contrast, those who are losing money in their trades invariably do not have a trading plan, or at least a semblance of a trading plan. This group of traders jump on tips provided by others without being able to check or verify the tips from some analysis, whether technical or fundamental. They do not have any idea of when to enter the trade or to exit with a stop loss.

Again, when the winning traders have computed their entry and exit and stop loss points, these traders can approach their trading day with guarded optimism, watching whether an expected rally is on the cards or not. By watching pre-determined price points, the trader can know whether a rally has in fact begun and to start to trade in a more aggressive manner or to stop trading on wrong expectations which comes so easily by being influenced by tips here and there. If the trade goes against them and hit their stop loss, they take their loss unemotionally and are out of the market, thus limiting their losses.

Remember, you involve hard earned money into your trading and investment.There is nothing VAGUE about trading. Every entry and exit points is calculated before hand to enable you to control your risk, if you are to become a successful trader.

Learn how to do this well and you will be a consistent trader. Test every tip and breathe specifics into your trades and you can make profits. In every profession, it is the specialist who makes the most money. Learn to excel in preparing your trading plan and you will be profitable.