Undoubtedly, online trading platforms have developed tremendously in the last few years. Private traders can learn to trade and access financial markets from anywhere allowing them to get their share of profits from trading. There are many possible trading strategies that can be employed. Calling someone a trader is a very general term akin to referring to someone as a sportsman. Different markets, different timescales, different decision matrices and different conditions mean that different approaches are needed.
Investing and trading is a relatively simply process once the rudimentary skills are learnt. Trading is an exercise in self control rather than an academic pursuit. Having the confidence to make trading decisions and stick with them (until conditions change or are proven wrong) can be both difficult and stressful. The markets are a psychological battleground where two opposing groups do battle - the bulls and the bears. The bulls speculate (and gain) from the markets rising. Bears, on the other hand, gain as the markets fall. When one of these groups is in the ascendency it pays to move out of their way or trade with them. As profits accumulate or bargains appear in the market even the staunchest member of these two groups will begin to soften. The air of superiority and conviction is lost and the opposing group begins to smell weakness. The tide turns, the market turns over and prices move in the opposite direction. A strong trader can spot these turning points and use them to his or her advantage. Finding these weak points is not difficult but taking up positions and holding them can be.
A successful trader will need to understand their trading system and also understand their own personality to be successful. Understanding and putting in place a sound trading system is not hard, understanding your own personality and controlling your actions can be much more difficult.
People who have addictive personalities, for example, and who may be prone to impulsive behavior, will find trading very challenging. Trading out of boredom or chasing losses are both behaviors that will result in losses (or more losses). It is not just impulsive people who will find trading a challenge; highflying professionals or academics often find trading a challenge too. One of the key principles of successful trading is to cut losses with firm discipline. People who are used to being right, most of the time, can find the admittance of failure difficult. Consequently they leave trades open (while losses mount) waiting to be right. This has been the end of many fledgling-trading careers.
Novice traders should spend as much time as possible familiarizing themselves with the workings of the financial markets, studying the basics of trading and also assessing themselves. Until trades are open with real money at risk you will not know, for sure, how you will react. Some people are surprised at how much control they have and others, often people who expect to be in control, struggle, panic and act with impulse.
It is often said that 90% of the rewards, in any profession, go to the top 10% in the field. If this is true of trading then the top 10% are very wealthy. The barrier to success is often the person and not the system.
The potential rewards from trading are unlimited. Before you commit too much money into the pursuit get some sound instruction and read as much as possible. Once mastered, trading skills are yours to use for life. You can trade from anywhere in the world with a laptop and an Internet connection.
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