A Beginner's Guide to Short-Term Trading: How to Maximize Profits in 3 Days to 3 Weeks

A Beginner's Guide to Short-Term Trading: How to Maximize Profits in 3 Days to 3 Weeks.

SHORT-TERM TRADING: THE GOOD NEWS Maybe you're a professional in your field, an entrepreneur, a retiree, a student, or a homemaker. You've probably observed the stock market and realized tidy profits can be made from the market's current volatility. Whether you plan to trade on a full-time or part-time basis, the benefits of trading are fantastic.

If you make trading your full-time occupation, you can choose when, where, and if you choose to work. You can trade from any location, as long as your comp~ ter is hooked up to the Internet. Office politi~s? There are none. A persnickety boss? You're the boss! Want to wear your bunny slippers to work? Do it! Catch the flu? Pull the covers over your head and stay in bed for as long as you want.
Got the time and money to take a week off? Have fun! If you'd rather trade
part-time, harmonize it with your regular job and add "luxury" money to your wallet. When you learn how to trade cautiously and wisely, your earnings may transform dreams into real rewards, such as the sailboat you always wanted, the vacation cottage in the mountains, or a college education for your children.

Here's a benefit some folks don't think of: When executed properly, short term trading can have lower risk than long-term investing. Many traditional buy-and-holders ride out bear markets fully invested, gritting their teeth while they watch their capital shrivel in value. Now you will know when to go "flat," or close all of your positions. You'll calmly put your holdings in cash during corrections and/or bear markets. And, you'll have lots of money to shop with, when the bulls once again take control.

THE FLIP SIDE

The stock market is the most challenging arena on earth. It takes no prisoners. It's a dog-eat-dog world, and only the fittest survive. Those who jump in without adequate knowledge or discipline usually get their heads handed to them in a hurry! To compete in this field, you have to be willing to persist and study hard. You have to cultivate the nerves of a bomb-detonator and develop the discipline of a marine corps drill sergeant. Short-term trading is riskier than socking your money into fixed income returns, such as Treasury bonds or money market funds. And the truth is, you will-especially at the beginning of the learning curve-experience losses. (The size of the losses are within your control.) Are you highly risk-averse? Does the thought of losing money send you running for the Maalox bottle? If so, you may want to choose a different investing avenue.

Collect it.