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  • Things To Consider When Trading For A Living 0 comments
    Feb 10, 2013 2:20 PM

    The lifestyle of a trader can be hugely rewarding, however it's not always a lifestyle that comes quickly. Showbiz loves to romanticize Wall Street by using busy exchange floors, exotic cars, and high profile scandals. In reality, this is not too far from the truth, yet for those of us who are trading for a living from our laptops, life is a little different.

    If you're a home based trader, the speed of trades will depend greatly on the online stock broker. Swiftness and precision are vital which is especially important if you opt to trade the news. The next big difference will probably be the level of funds you will be working with. The majority of newer traders start out with a moderate sum of cash and increase their account from there. And if you do have a ton of cash at your disposal, you'll probably want to start using a small and comfortable amount. The above elements may appear to be obvious, but they play a major role in why a lot of new traders do not succeed.

    As an up-and-coming trader with a somewhat limited balance, you actually can not spend your cash in 25 stocks at a time. You will need to find a limited number of suitable stocks, and then pick the ones you're going to trade. Those specific stocks must be within just a distinct price level to allow for a good return on your money. You aren't likely to be making a quality living trading $48 stocks and gaining 5-12% on a perfect trade. Having said that, you aren't destined to be operational for very long if you primarily trade the volatile 9 cent stocks. An appropriate trade-off needs to be struck in between risk and reward.

    However, trading for a living entails considerably more than merely trading the right stocks. Trading with an investor's funds is one undertaking. Trading with your personal bank account is another. And trading with your little girl's school savings is something altogether different. Mental resilience, versatility, and cash management are all crucial qualities which all traders need to learn. Once you fully understand these functions and integrate them in earnest, you're then no longer betting your money, you are running a lucrative business.

    Small businesses, much like smart traders, design strategies, guidelines, and contingency strategies to deal with the changes throughout the marketplace. Just like a market place, you will encounter up days and you'll endure down days. The secret is mastering a very sturdy strategy to manage those gains and losses as best as possible. The biggest error I see first time traders make, is diving directly into the trading market devoid of a strategy or 'home business' mind-set.

    If you intend on trading for a living, you should clear your head of what you may think you know, and concentrate on mastering material exclusive to home based traders. If you do, you'll end up a long way ahead of most new traders and can have a good chance at making great money trading for a living!

    Will Thorton runs a website to help teach new traders how to trade for a living with technical analysis. Jump into his technical analysis course today and learn something new.

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