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Learn How to Trade

So much mythology surrounds the issue of how to trade. Traders lose money. Traders make
money. Traders are insane. Traders are cold and rational. Trading is easy. Trading is a direct path
to alcoholism and ruin.

While swing trading systems hold positions for a few days, maybe even a few weeks, and
investors hold their stakes for the long term, with some looking to hang onto their securities for
decades and maybe even hand them down to their children, day trading systems never hold a
position or more than a day.

Learning how to trade professionally is most definitely not learning how to invest. Those that
truly learn how to trade professionally perform an important function to the capital markets
because they force the price changes that bring the supply and demand of the market into
balance. Learning how to trade professionally however, doesn’t create new sources of funding
for companies and governments. It doesn’t generate long-term growth.

Just because day trading systems aren’t compatible with investing doesn’t mean day traders
don’t have investments elsewhere. Many day traders withdraw their trading capital on a regular
basis to put into investments, helping them build a long-term portfolio for their retirement or for
other ventures they may want to take on. Still, because investing and learning trade
professionally have different mindsets, chances are the traders will have someone else manage
this money.
One of the biggest knocks on learning trading systems professionally is that it’s just another form
of gambling. And as everyone knows, or should know, in gambling, the odds always favour the
house. That’s not the case with learning (http://www.learndaytradingsystems.com.au/) how to
trade professionally, however. Consider these points:

In day trading, the odds are even in many markets. The options and futures markets, for example,
are zero-sum markets with as many winners as losers, but those markets also include people
looking to hedge risk and who thus have lower profit expectations than do day traders.

The stock market has the potential for more winning trades than losing trades, especially over the
long run. For this reason, the stock market isn’t a zero-sum market, like options and futures
markets. In the stock market, the odds are ever-so-slightly in the trader’s favour.

In all markets, the prepared and disciplined trader can do better than the frantic, naïve trader.
That’s not the case when gambling, because no matter how prepared the gambler is, the casino
has the upper hand.

People with gambling problems sometimes turn to learning how to trade professionally as a
socially acceptable way t feed their addiction. If you know you have a gambling problem or
suspect you are at risk, how to trade professionally is probably not a good idea for you. Day
traders who are closet gamblers tend to make bad trades and have trouble setting limits and
closing out at the end of the day. They turn the odds against them.




A lot of day traders lose money, and some lose everything that they start with. Others don’t lose
all of their trading capital; they just decide that there are better uses of their time and better ways
to make money than learning how to trade professionally.

A responsible trader works with risk capital, which is money that she can afford to lose. She uses
stop and limit orders to minimize her losses, and she always closes out at the end of the day. She
understands the risks and rewards of trading, and that keeps her sane.

Many day trading systems rely on leverage, which is the use of borrowed money to increase
potential returns. Leverage carries the risk of the trader losing more money than is in his account.
However, brokerage firms (http://www.learndaytradingsystems.com.au/), which don’t want that
to happen, will probably close a leveraged account that’s in danger of going under. That’s good
because it limits your potential loss.

Along with the relatively low rate of success, learning how to trade professionally is really
stressful. Concentrating on the markets and knowing that real money is at stake takes a lot of
energy. The profit amounts on any one trade are likely to be small, which means you have to be
persistent and keep placing trades until the end of the day.

Some traders can’t handle the stress. Some get bored. Some get frustrated. And some can’t
believe that they can make a living doing something that they love.

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Learn how to trade

  • 1. Learn How to Trade So much mythology surrounds the issue of how to trade. Traders lose money. Traders make money. Traders are insane. Traders are cold and rational. Trading is easy. Trading is a direct path to alcoholism and ruin. While swing trading systems hold positions for a few days, maybe even a few weeks, and investors hold their stakes for the long term, with some looking to hang onto their securities for decades and maybe even hand them down to their children, day trading systems never hold a position or more than a day. Learning how to trade professionally is most definitely not learning how to invest. Those that truly learn how to trade professionally perform an important function to the capital markets because they force the price changes that bring the supply and demand of the market into balance. Learning how to trade professionally however, doesn’t create new sources of funding for companies and governments. It doesn’t generate long-term growth. Just because day trading systems aren’t compatible with investing doesn’t mean day traders don’t have investments elsewhere. Many day traders withdraw their trading capital on a regular basis to put into investments, helping them build a long-term portfolio for their retirement or for other ventures they may want to take on. Still, because investing and learning trade professionally have different mindsets, chances are the traders will have someone else manage this money.
  • 2. One of the biggest knocks on learning trading systems professionally is that it’s just another form of gambling. And as everyone knows, or should know, in gambling, the odds always favour the house. That’s not the case with learning (http://www.learndaytradingsystems.com.au/) how to trade professionally, however. Consider these points: In day trading, the odds are even in many markets. The options and futures markets, for example, are zero-sum markets with as many winners as losers, but those markets also include people looking to hedge risk and who thus have lower profit expectations than do day traders. The stock market has the potential for more winning trades than losing trades, especially over the long run. For this reason, the stock market isn’t a zero-sum market, like options and futures markets. In the stock market, the odds are ever-so-slightly in the trader’s favour. In all markets, the prepared and disciplined trader can do better than the frantic, naïve trader. That’s not the case when gambling, because no matter how prepared the gambler is, the casino has the upper hand. People with gambling problems sometimes turn to learning how to trade professionally as a socially acceptable way t feed their addiction. If you know you have a gambling problem or suspect you are at risk, how to trade professionally is probably not a good idea for you. Day traders who are closet gamblers tend to make bad trades and have trouble setting limits and closing out at the end of the day. They turn the odds against them. A lot of day traders lose money, and some lose everything that they start with. Others don’t lose all of their trading capital; they just decide that there are better uses of their time and better ways
  • 3. to make money than learning how to trade professionally. A responsible trader works with risk capital, which is money that she can afford to lose. She uses stop and limit orders to minimize her losses, and she always closes out at the end of the day. She understands the risks and rewards of trading, and that keeps her sane. Many day trading systems rely on leverage, which is the use of borrowed money to increase potential returns. Leverage carries the risk of the trader losing more money than is in his account. However, brokerage firms (http://www.learndaytradingsystems.com.au/), which don’t want that to happen, will probably close a leveraged account that’s in danger of going under. That’s good because it limits your potential loss. Along with the relatively low rate of success, learning how to trade professionally is really stressful. Concentrating on the markets and knowing that real money is at stake takes a lot of energy. The profit amounts on any one trade are likely to be small, which means you have to be persistent and keep placing trades until the end of the day. Some traders can’t handle the stress. Some get bored. Some get frustrated. And some can’t believe that they can make a living doing something that they love.