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As I have explained before, trading and investing are vastly different. Every time you enter a position, you must be clear and honest with yourself: Is this going to be a short-term trade? Or a long term investment? I've seen Invest Diva students flip-flopping between investing and trading depending on the direction of the market, which only results in losing money. Here are three tips for short term traders to keep in mind-- no matter what.
1- Look for a Market Mover Event
Unlike investing, you should be looking for a quick market mover when you want to trade. An announcement. A data release. An important meeting minutes. These are when the markets move in a specific direction for a short period of time, giving you the opportunity to ride on and earn quick bucks; that is if your analysis is correct.
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2- Set a Stop Loss
You most certainly need to panic if the market goes against your prediction when trading. And you need to cut your losses short, without simply hoping that the market would go back to the direction you desire. Most successful traders are those who have low tolerance for losses and high tolerance for winning trades. Do not get tempted to move your stop loss. Just get the heck out, and start another trade. In a traders life, opportunities come on go much quicker.
3- Stick to Your Screen
Only trade if you know you have the time to check the market sentiment often. Some short term traders do decide to go long term in the middle of it especially if the market goes against them. But more often than not, you get stuck in a trend against you that plays your greed and fear like a toy, ruining other winning opportunities as well.
One final nugget of wisdom that stays true no matter what type a money making method you use:
Make Money. Have your Money Make Money. Repeat.
Make sure you have checked your financial health before trading or investing. Your financial situation may not be suitable for the risk that involves in trading or investing activities.
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This article was written by Kiana Danial for on .
This article published in collaboration with Scutify, the best app for traders and investors. Download the Scutify iOS App, the Scutify Android App or visit Scutify.com.
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