DO YOU LOOK FOR LONG TIME POTENTIAL OR FOR SHORT TERM RETURNS?

TO TRADE OR TO HOLD, THAT IS THE QUESTION!

how you trade stocksStocks are a risky asset and trading/investing in risky assets must be done with thought and deliberation.  Stock selection is possibly one of the most important components to being a successful trader, making consistent profits. Before you trade a stock you should ask why this stock?  Once you know what your goal is you can make a plan or rather two plans! A) Goal and B) What If! The concept of Swing Trading and selling Options is to seek consistent income and profits. Many stocks are meant to be traded, not held on to forever and a day.

How many stories have you read that tell you if you had bought this stock in 1973 and never traded it, today, it would be worth millions! But in reality who actually does this and how much capital have they tied up in the trade. We want our stocks working for us bringing in consistent returns and compounding our capital. Hope is not a trading strategy, we need to find a trading strategy that works for us, compounding our capital. Trading is a business!

For every investor that bought that one stock in 1973 there are thousands of others who bought another stock at the same time and got wiped out. It is easy to write the “if only stories”, sometimes you might get lucky and pick the right stock or you could be unlucky and sit in losses for years. By trading and continually growing your capital, every day, week, month and year you do not have to win the stock lottery. Think of your capital as a snow ball, with continual trading and compounding, the bigger your capital base the faster the snowball will grow. Continual trading and turnover of positions bring more capital in and allows you to trade even more positions.

TRADING IS A BUSINESS THAT NEEDS YOUR CONSTANT ATTENTION

Selecting a good stock that is ideal for long-term trading is essential. Choose one that is fundamentally sound, that you have confidence in and that you know is not going to go bankrupt and disappear overnight!  Get to know your stock, its trading patterns and trade those patterns. Watch for the warning signals that the trend is about to change, read the technical indicators as well as looking at the fundamental reports and adjust your strategy accordingly. This is the business of trading, we want to grow our capital and minimise our losses. Get to know every stock you are trading, have confidence in those stocks and then you can trade them regardless of whether they are going up, down or sideways!

Education, Fund Management, Shares TO TRADE OR TO HOLD?