Should You Become a Stock Trader?Trading stocks can be one of themost liberating careers that lead to ultimate financial freedom, however as ithas been dubbed many times over, trading is also “The hardest easy money youwill ever make.” As such, it takes a certain kind of mentality and attitudetowards trading to become successful, do you have what it takes?Characteristics of Successful Traders- Patience: Patience is a virtue as I’m sure youhave heard. Nowhere is it truer than in trading stocks.- Risk Appetite: Trading is inherently risky, itis guaranteed that at some point you will have a trade that will lose you money,you must be okay with taking on risk.- Adaptability: The market is constantly changing,you must be able to change along with it.Expectations from Trading Stocks- Trading is not a “get rich quick” scheme- It takes money to make money, you will need asubstantial amount of capital if you want to make a living off just trading.
– Trading is a job just like anything else, youwill need to put in plenty of time and effort into learning and studying themarket.Length of Time Holding TradesWhen trading stocks it isimportant you know how long you plan on holding a position for. If you plan onjust buying positions and selling them within the same day you would beconsidered a “Day Trader” Day traders hold positions for the shortest amount oftime and typically don’t hold any positions overnight. Next there is the “SwingTrader” who holds positions for a few days to a few weeks, swing trading ismuch more flexible than day trading as you don’t have to be constantly in frontof your trading screen.
Lastly there is the “Position Trader” who hold tradesanywhere from a few weeks to a few months. Position trading could be the idealway to start trading on the side as it provides even more flexibility away fromthe trading screen that even swing trading.Types of Trading- Fundamental Trading- Technical Analysis- Momentum Trading- ScalpingBasicsSteps to Begin Trading You don’thave to be a millionaire to start trading stocks, you can start with as littleas a couple thousand dollars and as you become more experienced increase theamount of capital in your trading account. First order of business would be toopen a brokerage account, there are many options so do some research and seewhich suits you best. After you open a brokerage account begin paper trading.Through paper trading you will gain experience that will lead to the next step,developing a trading plan.
After developing a trading plan and testing it outsome more in paper trading, you are ready to deposit money into your brokerageaccount and trade live.Being a Stock Trader Can Lead toFinancial Freedom Ifyou have the patience, risk appetite, and adaptability to become a stock traderyou should definitely give it a shot. Make sure to do some soul searching todetermine which time length and type of trading suits you best and beginlearning everything you can about the current market.
With paper trading youcan experience the market without risking any of your hard earned money sothere is no reason you should not give stock trading a chance.