Trading For A Living - Fool's Paradise Or Actual Objective?

By Peter Skonctuedt

To be able to do trading for a living is a dream of countless part-time traders. One only has to look at the numerous seminars, training sessions and trading bush camps these traders attend to understand how intensely they want to do this. The lifestyle of a full-time trader looks so perfect: you never have to leave your desk, never have to face an angry boss. You can take leave whenever you want. You determine your own salary.

Without the right set of tools, this will stay an elusive dream for all those hapless part-time traders though. Let us take a look at what you will need to make it a reality.

The very first thing you have to understand right from the start is that you will not be trading against other traders. Neither will you be trading against the market. You will be trading against yourself Your own strengths and weaknesses will go with you into trading and determine whether you are successful or not.

You can study hundreds of trading manuals, do all the courses and buy all the top software packages, but if you are not able to control your trading weaknesses, they will control you. If you are not able to let go of a losing trade, if you hang on to it every time because you are the type of person that can't face a loss, this will eventually ruin your trading career.

The same is true if you do not develop the discipline to let a winning trade ride - to allow it to reach its full potential and make some serious money. Selling winning trades the moment they have made a little money and staying in losing trades forever are the two major causes of failure for newbie traders.

Another decision you have to make is which time frame you want to trade in. Do you want to be a day trader, do swing trading or be a long term trader? This will also largely be determined by your personality type and your approach to risk. Day trading is much more risky, but if you like the adrenalin rush and you can stand numerous small losses while you wait for one big win, it should work for you.

You will need to decide whether you are going to trade in shares, in commodities or in currencies. Each one of these requires a special set of skills and tools. Share trading will require that you study the financial statements of the companies involved and the underlying market conditions for those companies. With commodity trading you have to get familiar with the market in that type of commodity. The same goes for currency trading.

The right tools are of course very important as well. To start off with you need knowledge. You need to get familiar with reading financial statements and analysing charts. You need to understand technical indicators, how to use them and how to interpret movements in these indicators

Furthermore you need to register with a company that will provide you with the latest prices for the instruments you want to trade in. Many free services provide delayed prices - which is good enough if you trade in a longer time frame. If you want to get involved in day trading, you absolutely have to make sure you get live prices though.

Trading for a living can be a reality sooner than you think. Approach this in a systematic way. Start with yourself, get yourself ready, and then get the right technical tools. - 23196

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How To Improve Your Currency Trading Game

By Richard Shell

The first thing I did when I thought about writing an article about a punter was to find out what the term meant, especially in relation to forex trading (the theme of my article). On the web, I searched for the term punt, but came up with a myriad of definitions. Searching for 'punter' was more successful, and the definition I was looking for turned out to be British. The term 'punter' describes one who stakes a bet against another person, or bookmaker.

Through my searches, I did not find a formal definition for the word 'punter' in forex trading. In line with the general definition for 'punter' that I had found, a punter in forex trading is someone who treats trading more like gambling - they trade using instinct and often appear to go against the market.

My desire to write an article about punting is partly down to the fact that after decades of forex trading, I occasionally have the urge to take a punt, to gamble on a trade. It is only discipline that prevents me from going ahead. In my early days, I was a bank trader. This was before the days of screens providing all the market details, and we had to rely on instinct in order to trade. Perhaps it is this background which leads to my desire to punt nowadays. On the contrary, it may be the wealth of market information that we now have available. You can focus on the price action on the screens and get drawn into trading that way. Either way, punting is not a method for long term success, no matter how good your market instincts are.

Basing trades mainly on gut feelings often leads to early profits when you get it right. However, losses often come too late when you get things wrong. A reason for this is that the trades have not been well reasoned. There is no risk/reward strategy with defined stop points and targets for profits. Instead, these trades are based on using instincts to hope you have timed your trade to catch the top or bottom of the market.

Today (Oct 20, 2009) there was an event that prompted me to write an article about punting. The Bank of Canada made its monetary policy decision - there was no surprise that they decided to keep rate unchanged. This announcement caused the USD/CAD to firm after the previous day where a weak US dollar had caused a sharp fall. Trading was in the region of 1.0310 before the decision, but afterwards, as the price started to firm, punters were looking to sell at every pause. This was also my instinct. However, discipline told me to hold off and look at a chart. I soon abandoned the idea of selling. The USD/CAD price hovered at various levels through the day, sucking the punters into trades. It finally peaked at around 1.0525. Punters may have been lucky and grabbed a few pips by fading moves and quickly buying back, but the price action offered a poor risk/reward strategy. Losses far outshone the gains, unless entry was timed right.

Neither punting, nor any other form of forex trading, are a guaranteed method for long term success. It has been said before, and it is worth reiterating, traders who treat currency trading as though they are gambling in a casino, will get the same results in the long term as though they were gambling in a casino. If forex trading is treated as a business, with strong analyses, risk/reward ratio strategies and good money management, there is a far greater chance of success. - 23196

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Useful Stock Research Through Newsletters

By Kelly Dearmond

My granddaughter's interest in investing gave me the incentive to begin learning about it. Every weekend, my granddaughter came to my house and read the Sunday newspaper. At only 8 years old, my granddaughter loved the Financials section.

My granddaughter's interest in investing never faded. She always told me that I needed to be paying attention to what she said, because I needed to make sure my future was secure. I began to pay attention. At first, I could barely read the Financial section. Now, I have accounts with several brokerages, a financial mentor, and an accountant.

One of the biggest complaints I've made to my granddaughter is that market timing reports just seem like fortunetelling. Some investment newsletters have very little substance, while others are all just focused on the current market. The worst stock market newsletter I received only discussed huge market gains and losses that had occurred 6 months ago.

After constantly insisting that these investment newsletters are not accurate, I was able to convince my granddaughter to locate an investment research firm that does have accurate, timely, and data-driven information. My granddaughter began searching the investment research firms, and examining their research methodologies. She found My Strategic Forecast online a week later.

The sound research provided by My Strategic Forecast is delivered to my email inbox in the form of financial newsletters, investment newsletters, and stock newsletters. Through their examination of historical events, My Strategic Forecast puts the market forces which shape our economy in their right perspective. In one situation, they analyzed pre-World War II economic factors, and applied the information to the airline industry prior to the Iraq War.

Through their attention paid to historical trends, My Strategic Forecast has proved to be a wise investing tool. When I receive their newsletters, I become excited, and I can't wait to have a moment to review them. Through careful efficiency, the company thoroughly analyzes all relevant data before expressing their opinion. They take into account political information, geopolitical information, and even data about weather trends. I'm able to get the biggest picture possible about what is going on, what went on in the past, and how to gauge my bets on the future.

My granddaughter did well, she is now a Securities Account Manager for a large firm; we still laugh about reading the Financials section together. My granddaughter is also a subscriber to My Strategic Forecast as she believes that their methodology is unlike any other in the business. I feel lucky to have such a smart granddaughter looking out for me. - 23196

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If you want to look at what My Strategic Forecast is, go ahead and click their website.It's full of priceless data that will show you a new system to conduct market analysis investment research.

Trading For A Living: Is It Only For The Mugs?

By Peter Skonctuedt

It is surprising just how many people keep asking expert traders what the key to succeeding with trading for a living is. As a matter of fact, people that are sick of their jobs and having to answer to bosses are the ones that are the most in need of help with learning how to earn money from trading. This is understandable because if you are serious about making a lot of money then working at a regular job represents the worst option and in addition it is also a very inefficient way of making money.

So, before you get an answer to the question as to how you can succeed in trading for a living it is necessary to identify the amount of money you have available and also how much you wish to earn. What's more, there are some traders that are ready to risk all of their money to earn the same amount while other people would risk less money and expect to earn less.

When it comes to understanding how to trade to make a living you need to also understand that sometimes you might lose money and other times you will make money. Even the most experienced traders lose money; so, it would be wrong to expect that you will always succeed in making profits year in and year out.

The real crux of the matter is that you need to identify what making a living means to you and also whether you have a system that you can put to use in order to achieve your goals. Provided you act with discipline and remain committed and you persevere there is no reason why you cannot learn to make a decent amount of money out of trading.

You can, for example, purchase a stock on a Monday and then when the stock moves in an anticipated direction, over the next few days, you will start to earn money for as long as you hold on to the stock. This shows that for a single act (buying the stock) you will make money over and over again (for each day that you hold on to the stock).

Even if you do behave like a would-be Olympic champion there is still no guarantee that you will succeed because even a single mistake at any time can put paid to all your efforts and causes a huge loss of money to you.

There are fortunately a few systems that have been developed by people that have indeed succeeded in earning a good amount of money from trading. If you spend a little money you can make use of such solutions that help you understand market forces (to a certain degree) and in this way you can learn how to make a profitable deal.

Most people that have succeeded in trading for a living have realized that they do not need to monitor the market on an hourly basis. What is required is managing their trades for between ten to sixty minutes on a daily basis. But remember what an old adage says and that is that you may be able to do anything in your life; just don't attempt to do everything because that is a surefire means of inviting failure instead of success. - 23196

About the Author:

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Shorting Stocks Explained

By Ahmad Hassam

When the market is falling, investors sell short a stock with the goal of profiting from the fall in the price of that stock. Many beginning investors get confused when they realize that it is possible to make money when the stock falls in price. In practice, shorting a stock is as easy as buying stocks once you get hang of it.

When you short a stock, you borrow it from you broker and sell it with the intention of buying it back at a lower price in the near term future and returning it to your broker. The difference between the selling price and the buying price in case the price goes down is your profit.

With short selling a stock, you make profit when the price of a stock goes down. You are anticipating further fall in the price of the stock when you short a stock. However, if the price of the stock instead of going down starts to go up, you get a loss. It all depends how well your prediction about the stock price was. If you can predict the direction of the stock price very well, you can become a great trader.

Theoretically a stock price can go up and up making your loss as big as infinity. So shorting a stock without proper risk and money management is not wise. However, before that happens most probably you will receive a margin call from your broker that leads to a forced sale before your losses reach unmanageable proportions.

Some people are against the strategy of shorting stocks. In the stock market crash of 2008, many financial companies went bankrupt due to the short selling of their shares by the speculators. A temporary ban was put on shorting for sometime during that period.

Swing trading is all about looking for making a quick profit by riding the trend in the market for a few days to a few weeks. In swing trading, we are simply looking to profit from the ups and downs of stock prices. When the price of a stock goes down, short selling is the best swing trading strategy. However, the goal of short selling is not to drive the price of a stock to zero and put the company out of business.

One reason why swing traders love short selling is due to the velocity of the moves! Negative news like poor earning, credit rating downgrade or a poor product launch can bring down a stock price in a matter of minutes and wipe out the steady gains made in months.

Swing traders always look for big winners and this brings them to the short side of the market. When the price of a stock starts to fall, chances are it will fall more before the market stabilizes and the price starts to rise again. Shot selling can be a good hedging strategy for long term investors too. So if you a long term investor, you can lessen the impact of the sharp price drop on your portfolio by using a short selling hedging strategy. - 23196

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Mr. Ahmad Hassam has done Masters from Harvard University. Try This Cash Printing Forex Signal Service From Heaven! Learn Swing Trading!