How Do You Trade?


Quick Answer

To trade successfully, draft a good strategic business plan, and apply a suitable trading style, according to Investopedia. When choosing a style, you must consider various factors, such as your account size, your trading experience, your personality and the amount of time available for trading.

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Full Answer

To trade is to participate actively in the financial markets with an aim of making a profit, explains Investopedia. To succeed in trading, the trader should handle it as a business, keeping in mind that trading is a business in itself.

To draft an effective business plan, be sure to set both short-term and long-term goals that you intend to achieve in your trading, advises Investopedia. Include the capital amount at your disposal and a strategy on how you intend to set up a good working office. State all the details of the trade and the methods you apply in your trading. The business plan should be concise and objective.

Trading styles include position trading and scalp trading, notes Investopedia. Position trading involves a prolonged trading lifespan that can be months or years. This allows the trader to apply both long-term and short-term strategies. Scalp trading is a very active style of trading that features frequent buying and selling all through the trading time frame and targets price changes within a day to make profit.

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