For many first-time investors, the best way to learn about trading is, inevitably, to take part and experience it for yourself, with the stock market seeming like the most attractive proposition.
Just as with any type of investment, trading on the stock market is risky, but by doing your research and learning from those who have experienced great success on the market, these risks can be minimised. In this article you can gain an insight into the successes of the best stock traders, who have made their fortunes in online stock trading as well as pick up some useful tips that you could apply to your own trading venture.
Ross Cameron
One day trader who has experienced great success trading stocks, is Ross Cameron. In 2016 it was reported that he had made a staggering $222,244.91. In 2012, Cameron founded Warrior Trading, a platform to offer training for individuals who want to learn more about day trading and chat with others participating in trade on the market.
Cameron’s day-trading strategy is revolved around trading low-value stocks and making large profits, benefiting from their collective value over a prolonged period. His advice to others wishing to adopt a similar trading strategy is to develop an ability to recognise when a position has been exhausted and to exit accordingly.
He also advises traders to trade at a time in the day when they work most productively. For Cameron, this was the morning, so he maintained a routine whereby he traded between 9:30am and 11:30am, and when he could attentively analyse data and charts.
One of the most important factors that he attributes his success to, is knowing which stocks to invest in. His tactic is to identify stocks that offer a prospective move of 20% to 30% in one day. In order to do this, Cameron will look at other stocks that have previously amounted to this and make a comparison with stocks that are available to trade at that time.
Paul Tudor Jones
Paul Tudor Jones first emerged into the public eye in the ‘80s when he astonished the world by predicting the 1987 stock market. Born in Memphis, Tennessee in 1954, Jones entered the finance world by trading cotton. The main investment that he can attribute his success to is his trade on the Dow Jones Industrial Average as it plummeted 22%, and where he made an estimated $100 million.
He was a hugely influential figure in the global macro investing field and was a vital player in the colossal growth of the hedge fund industry. In 1980 he also founded his own hedge fund, Tudor Investment Corp and has secured himself a very impressive net worth of nearly $5.8 billion.
Being such a key figure in stock trading, there is plenty that we can learn from Jones and apply to our own trading strategies. His approach to reducing risk-taking was to assume that every position that he took was wrong and to know exactly where to place his risk points. This meant that if his positions were not following his predictions, he had a well-developed exit plan that he could execute in order to minimise losses.
Ray Dalio
Ray Dalio, American billionaire, is the founder of Bridgewater Associates, an investment management firm that he established in 1975. Dalio has made his fortune in the hedge funds sector of the stock market and as of June 2019 was named the 58th richest person in the world.
Dalio made his first investment when he was just twelve years old, purchasing shares in Northeast Airlines which amounted to $300. His prowess in the stock market was evident even as a child, as he tripled his investment.
In his career, Dalio has advised some of the richest individuals in the world, so there’s plenty of things that can be learned from his vast experience and success in the stocks market. Dalio says:
“If you work hard and creatively, you can have just about anything you want – but that doesn’t mean everything you want. Maturity is the ability to reject good alternatives in order to pursue even better ones.”
He emphasised the importance of learning to trade without being influenced by emotion. The stock market is highly volatile, meaning that often you will have to make split-second decisions, that could be the difference between a profit and a loss. Having a well-developed trading psychology is just as important as the actual strategy that you employ. Exercising discipline, and avoiding fear and greed, are key factors that can determine the success of your trade.
