5 Strategies All Successful Traders &

Investors Use
Presented By AwesomeStocks.com

The goal of this ebook is to give you the tools needed to increase the probability of being a successful
investor.

You will not succeed if your strategy is focused on beginners luck, hope, or relying on that “guru” that
seems to know everything.

We have developed a list of strategies that all successful traders and investors use.

As investors, the only variable that we have control of is ourselves. Therefore, it is critical to have the
appropriate strategy and mentality before investing, in order to position yourself for success.

Before you invest any money you need to make sure you understand and fully implement the following
5 strategies, otherwise you are simply gambling, not investing.

1. Capital Preservation Is The Most Important Part Of Trading. Have A Stop Loss - The most
important aspect of investing is risk management. Stated simply, how much can you afford to
lose before you walk away from the investment. Capital preservation is more crucial than your
battered ego at making an incorrect investment/trade that loses you money. The stop loss is the
proverbial line in the sand. Often overlooked, without understanding and predetermining your
stop loss in advance, your entry price nor your price target mean nothing. Your stop loss
protects you for the investments where your established purpose for the investment is
incorrect.

2. Every Investment Must Have A Purpose. Answer The Question Why? - There can be no
investment unless there is a purpose. When you are investing money, you are assigning a
purpose to that money to fulfill a certain obligation to you. Without purpose, your money will be
lost fairly quickly. Therefore, not only should you have a why, but your why should be
compelling enough to even get you interested in putting your capital at risk. Focus less on the
narrative and more on the actual facts.

3. Know Value Vs Price. Establish An Entry Price - Here you need to delineate the difference
between price and value. Alone, price means nothing, therefore you have to place a context
around this price in order to understand specifically the risk and potential upside. Price is what
you pay, value is what you get. Your default expectation should be that every trade/investment
has a higher propensity to lose money, than win. With this mentality, you are establishing
 yourself to avoid the greed and fear dynamic that accompanies every investment. Always have a
very frugal mentality when selecting entry price. This increases your odds of making money. At
the end of the day, buy low sell high is the strategy.

4. Time Horizon - The time horizon determines the length of time you can afford to test your
hypothesis. Remember, if your “why” is incorrect and you fail to realize this, you forgo making
other profitable investment opportunities. This is referred to as your opportunity cost. You want
to utilize your capital in the most efficient manner possible to maximize your returns. Simply
throwing money at an investment indefinitely with no time horizon is not a means at maximizing
your returns.

5. Price Target - This indicates your upside potential, otherwise known as your “reward”. Your
reward should always exceed your “risk”, otherwise you are simply gambling. Having a price
target is critical to understanding when your investment is overvalued so that you know when to
exit the trade. However, the price target is the furthest variable out in time thus making it the
least certain information that you have to construct your investment decision. Regardless of
your investing time frame, which can be days, months, or years the price target is a best
estimate of future price using today’s available information. Since information constantly
changes, your price target becomes outdated the moment you establish it. Nonetheless,
knowing at what price you plan to exit the investment is a necessity, otherwise there is no point
in investing in the first place.

These five strategies might be the hardest, yet most critical steps to successfully investing money.

Happy Trading!

AwesomeStocks.com

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