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The two main strategies that money making investors make are based on either growth or value tactics. Investors either look for companies that are growing earnings or that have stocks that are priced cheap that they expect will go up in value. Some combine both strategies.
Too many new (and even "experienced") traders think that they're on the road to success simply because they've memorized a way to read charts. It's just not enough. Good stock trading education has to utilize good money management.
Why is trading the eMini better than trading stocks? There are many reasons, in my online gold coins opinion, but I will discuss one of them here, and other reasons in future articles. I prefer eMinis to stocks because they avoid certain types of risks. In economics the term exogenous is used to refer to an event that occurs "from outside" the system, model, or idea you are considering. It usually is an unexpected event that creates a shock to the system. For some traders, exogenous shocks can result in a windfall of profits, but for most traders, they result in losses in their brokerage accounts-which leaves them shocked.
There's a tricky balance between investing in stocks and staying solvent. Stockmarkets have a horrible tendency to tank just when you're most in need of money. Being forced to sell shares while the market is in a funk is a disaster, so having a balance between long-term debt and different sorts of investments is really important. By-the-way, short-term debt and stockmarket investment don't mix. Don't do it.
You could also call your risk a different name -- the unknown. You cannot accurately predict what stocks will do every time. For example, you might purchase a stock that you expect to rise in price over time. You are looking forward to receiving nice annual dividends. However, the company is sued and experiences financial problems. You may not see the dividends you were betting on. In fact, if the company goes under, you could lose your entire investment. You've just met risk face to face.
With the help of a financial planner, you can be sure that you are not investing more than you should - or less than you should in order to reach your investment goals.