Author: Louise Andrea Jimera
Traders. When you hear this word, you instantly think up an image of two types of people: One that is wearing a business suit while on a tropical vacay with a drink in hand (however inappropriate) and the other looking like a chronic couch potato in his boxers watching Netflix.
Why is this so?
People have different idealizations of traders, you see. Some tend to think that people who aspire to become traders want a life bigger than what they have now. And who wouldn’t? I’m pretty sure that if you were given a chance to live a completely different life than you have now, you too will have second thoughts. To dream big and actually become big is an accomplishment worthy of praise. And for many people, they believe that trading is there ticket to success.
Another perception of people who claim to be “traders” is that they’re nothing but a bunch of unemployed individuals (who also refuse to be employed, btw) and is looking for a shortcut to success. This really puts traders in a bad spot as their reputation is viewed incorrectly. Check this out: https://www.investopedia.com/articles/active-trading/013015/worst-mistakes-beginner-traders-make.asp.
The reason why there are two completely different perceptions of traders in the first place is because it’s true. Some people are getting into the activity in order to bring change into their lives – even if it means working really, really hard at it – while others tend to make trading an excuse for lazy and complacent lifestyle. Among these two different types of people, we are hoping that you are the first one – a person with a real drive for financial freedom. You know why? It’s because trading, when done for the right reasons, can really change your life for the better.
Still, it wouldn’t work for a Mr. Lazy Pants though.
What Makes A Real Trader
Trading is not for everyone (read more). Even if lots and lots of people take an interest in trading (like back in 2010 when the internet was crazed over Bitcoin), it doesn’t mean that they can all be traders. To become one, you need to have patience, perseverance, and the right skill set to make meaningful financial decisions. If you do it half-heartedly and haphazardly, you’re in for terrible financial losses. This is why many so-called “traders” go bankrupt as soon as they start trading real money.
First off, you have to be willing to learn. Whether it be the stock or cryptocurrency market that you’re planning on entering, fact of the matter is that you will need to invest a significant amount of time and effort to familiarize yourself with market activity. If you think you have these kinds of attributes, then I guess that prequalifies you to become a trader. At the very least, you would have the aptitude to become one.
What comes next is just hard work and patience. If you simply rely on trading software and not learn how to deal with these kinds of negotiations yourself, you’ll end up digging your own financial grave. I mean, sure there are many promising software out there but if you really want to be on top of your game, you have to get in the game – understand? Also, you have to be clear on what kind of trader you’re going to be.
You basically have two options: Day or Swing Trader.
Day Trading VS Swing Trading
This is not really gibberish; it’s quite easy to spot the difference between these two types of traders. If you choose to “day trade,” this means that you acquire and dispose of stocks or currencies in a period of 24 hours. Trading Review can also provide you good input on this topic.
Say, you start by investing $500 into stocks. You let it roll for the next couple of hours and sell them off when you think the time is right, and maybe earn yourself a little profit on the side. As you may already guess, in day trading, there are good days and bad days. There are times when you make right purchases and you get to bring home the bacon. Other times, you sell off what you have for less than what you bought them for. I guess it’s just all in a day’s work.
Now, swing trading is a little different. This is the kind of trade you do when you don’t really have any plans for your money yet – so you invest it in stocks or currencies (or both). And instead of selling them off after just a couple of hours, you let them sit for a while. Most people would go several months at a time. This gives your investment more time to grow and assuming that you’ve partnered with a company with promising growth, your stocks are bound to increase in value over time.