Over my years of trading stocks, Ive learned just as much about myself as I did about the stock market. As a matter of fact, it seems that the more you learn about the way you trade, the more successful youll be in trading stocks. If youre a beginner investing in the stock market, that is something you should keep in mind.

During the time that I was working full-time, I didnt have time to sit and watch the tickers during the days trading hours. I would sit home at night and catch up on the days news and do research on the stocks that I was interested in buying. If there were stocks that I decided to buy, I would set up a limit buy order, which was typically lower than the stocks closing price. The next day after work I would come home to see how my trades went.

After I stopped working for someone else, I started spending more time during the day tracking the activities of the days events on Wall Street. I would be able to keep closer tabs on what was going on and react when I thought the time was right and the opportunity was good. I also started to take Jim Cramer, and his stock investing tips, more seriously.

I started to notice that my gains werent as good as they were when I was working. I wondered what was the problem. I took a little while for me to realize I had changed my trading strategy, without meaning to.  Since I was able to watch the stock market more closely, I was also exposed to the constant fluctuation of the share prices.

For example, lets say I was researching stock XYZ  and it had a share price at the close of the day of $20.65. I would set the limit order to buy at $20 per share. Since I was at work I never really saw how the price reacted throughout the day. Once the price dropped to my target, the sale would trigger at the point and I would have my shares at the desired price.

When I was home and watching throughout the day, I started to react to the minute by minute moves. Lets use the same example of stock XYZ. If the price opened up at $21.05 and then for the first hour or so of trading it moved up to $21.35, I would think that others had seen the same good numbers on XYZ and were buying up as quick as possible. I would set a limit order at $21.25 just to grab it a little lower than where it was. Wouldnt you know that after the stock climbed, it started to descend. It would go down below where it closed the day before and in some cases, go below the original limit order price of $20 per share.

What I was doing is what I refer to as chasing a stock. Chasing a stock will do nothing for you but make you lose profits and wait longer for a turn-a-run after youre in the hole by a couple of percentage points. Granted, the stock I would get into would go up well above the $25 dollar range and I would still make a profit, but like I said earlier, my profits werent as big as before.

If you want to be successful in stock trading, you need to understand your actions first. Many people dont realize that the individuals emotional state will totally effect the profitability of your portfolio.

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