Stock trading does not have to be a full-time endeavor. Most individual investors trade part time to supplement income from their main occupation with occasional stock profits. However, as in any professional activity, the more time and effort you put into stock trading, the better the results you can expect to achieve.
Stock Trading Skills
To trade successfully, a stock trader needs a variety of skills such as knowledge of the markets, fundamental and technical analysis, stock selection, emotion control and money, risk and portfolio management. The more time an investor spends learning and practicing those skills, the better the potential outcome. Stock trading cannot be learned just in theory: investors act differently when they paper trade than when they actually put their money at risk.
Competition and Risks
Many amateurs are drawn to the stock market by the allure of easy profits and a glamorous lifestyle in the fast lane. Few would attempt to be a part-time lawyer or brain surgeon, but an amazingly large number of investors think they can make a lot of money trading part time. Amateurs are competing with the brightest minds on Wall Street, whose job is to take amateurs' money legally and painlessly. Many new stock traders wash out within five years, after having lost their trading capital. The more seriously a trader takes stock trading, the greater his chances of success.
Stock trading obviously requires capital. The initial outlay can be small, but the more money a trader makes, the more he has at stake, and therefore the more time he must spend managing it. A trader can start part time but at some point he may have to choose between stock trading and his day job.
Professional full-time traders are a diverse group that ranges from individual investors trading for their own account to large institutional traders trading their firms' or client's capital. Daytraders are a special bunch: because they attempt to profit from daily price fluctuations, they must watch the market in real time during trading hours, which makes daytrading a full-time commitment. A novice who wants to daytrade only occasionally, when he has time, or by following buy and sell signals from commercially available software, is likely to fail.
- "Reminiscences of a Stock Operator"; Edwin Lefevre; 1994
- "Stan Weinstein's Secrets From Profiting in Bull and Bear Markets"; Stan Weinstein; 1988
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