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How to Trade Like the Pros

Learn from the best and apply it to your strategy.

By Claire PetersPublished 5 years ago 3 min read
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Trading is no less a contact sport than professional football. Glory and disappointment are the extreme weights of each decision. The good news about trading is that, unlike playing in the NFL, you don’t have to be a professional to play with the big boys and girls.

It’s wise to consult professionals when developing a trading strategy that suits your goals, but if you’re willing, you can learn to trade like a pro. Don’t be spooked by the images of slick-talking sharks in shiny suits with even shinier hair that’s so slicked back that it looks like they just got through traveling at Mach speed. That boogie man is largely a Hollywood creation.

With the right strategy, you can succeed and trade like the movers and shakers that you admire. There are different markets and strategies in trading, and it is key to know which one is best for you. Though you should seek advice from a professional when trading, you also need to learn as much about the ins and outs of the game for yourself. Here are some strategies that can help you to glide through the sharky waters of trading.

What do you want to trade?

The most fundamental question you will need to ask yourself is, “what do I want to trade?” There are so many markets and ways of putting your money to work in them.

The stock market is perhaps the most popular one of the different markets. That is where you go to buy shares of companies that are household names in many cases.

The commodities market is where people take positions on the three most important resources in the world: food, metal, and energy. These resources can be foods such as sugarcane, metals like gold and silver, or an energy source like crude oil.

The Forex market, while not as well-known as the stock market, is the largest market in the world. Forex is the marketplace for trading one currency for another. It is all about betting on the power or weakness of a particular country’s currency.

Position Trading

Position trading, also known as buy and hold trading, is a very popular trading strategy. It is a strategy that is based totally on patience. The logic behind it is that the gains that a company makes over a long period of time will be significantly greater than the gains made in the short term.

Position trading is also called buy and hold trading because traders will hold on to their position for months or years before coming off of their position. Oftentimes, buy and hold positions become long-term investments rather than positions for trading.

Another key feature of position trading are the methods used to determine what and how much to buy. As previously mentioned, position trades often become long-term investments. Due to this, position traders put companies under an intense microscope before pulling the trigger on a buy. The factors that day traders weigh range from employer/employee relations to supply and demand. This meticulous method pays off for traders who are able to keep their eyes on the long game.

Day Trading

Day trading is the most commonly known type of trading. It is what its name implies. All positions are finalized at the end of the day. Profits and losses will have already made their impact by the time that dinner is on the table.

Day trading is a much more active form of trading. In fact, it is often held synonymous with active trading.

Day trading is usually left to professional traders, you know, the Hollywood Wall Street Guy, but online trading has opened it up for everyone. However, there are so many strategies within day trading that it is wise to get some kind of advice from a pro. An experienced professional trader can present to you such approaches as swing, pivot point, and binary options trading strategies.

The most important thing for beginners at trading to remember is that consistency and resolve are key. To succeed, you have to pick a strategy and stick to it. Sure it can get scary when you’re swimming with the sharks, but the more you learn, the more they’ll be worried about swimming with you.

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