The word ‘Trader’ will mean different things to different people but the best place to start would be by saying what a trader is not.
It’s not getting up at 10 am
Walking out to the sundeck of your yacht, opening your laptop, hitting buy or sell a couple of times and then retiring to the golf course or country club for the day. All of the traders I know work at their craft and spend significant time doing so. They look for edges, they endeavour to improve their efficiency, drive trading costs down, maximise their returns, improve the ‘system’… all the time.
Tradingdoes not come easy and anyone who tries to sell you that dream should be treated with suspicion (and perhaps contempt). There are no day-long courses that will teach you everything you need to know about trading. Sure, they can help you on the journey but they won’t give you a complete, instantly profitable strategy. Nor is buying someone else’s strategy off the internet likely to yield long-term, profitable results.
Trading requires some inward reflection
Some introspection to figure out who you are when it comes to your engagement with the market. What amount of risk you are willing to take, what types of instruments you like to trade, how much time you can dedicate, what strategies you will use and whether or not you have the staying power to work through the rough patches to find the elusive gold. For beginners, there will be many mistakes along the way. For those of you who are experienced, it’s never a waste of time to review your strategy, consider new ideas and try to improve your results.
The Importance of a Trading PlanChris Conway has been working in the financial services industry for more than 10 years, primarily as an equity analyst. He is passionate about both fundamental and technical analysis, believing that a combination of the two yields the best performance returns. A regular market commentator, Chris appears frequently on Ausbiz and is regularly quoted in The Financial Review, The Age and Sydney Morning Herald, Reuters and The Australian. With his rules-based approach to markets and passion for technical analysis, Chris looks after the Technical Trades section of the Marcus Today Newsletter.