TFMS Why Trade?

Why Trade?

	...I will address the question "Why should I learn to trade". Not long ago, being a short-term trader was seen as a stress and anxiety filled endeavor. It was seen as very risky when compared to the "safe" approach of by and hold. However, over the course of the last year we have seen many of the nations most popular stocks, many which were said to be "safe long term investments"
	loose upwards of 50% of their value. A few have gone out of business leaving long term investors holding the bag. Watching a stock you own drop 50% or more in a matter of weeks (or even over the course of a year for that matter) is a very stressful situation indeed. This is an experience that the nimble and astute short-term trader never has to go through. It is during the times of extreme turmoil in the market that I am always the most grateful that for the most part I am a short term trader and not an investor. As at trader, during these times which may be very stressful and upsetting to an investors, I may be making even more money than I was when the market was going up. How is that? I can go short. As a trader, I can barrow a stock from a current shareholder and sell it at the current market price. Later, when the price of the stock is lower, I can buy it back and return it to the original owner. In this way I can profit when the market moves lower. It’s a well-known fact that stocks will fall faster than they go up as investors’ panic. During other times, the market will become very uncertain. It is during these times, when the market moves lower, then higher, then lower, then higher that I, as a trader will sit in cash. While I am in cash, I have no exposure to the market and can not loose money no matter what happens. Selling short and sitting 100% in cash are two advantages long-term investors do not have. For my money, they are two of the greatest luxuries in the world. Another advantage of short term trading is the accuracy that can be achieved. Think of it this way: What will you be doing in 5 minutes? You can probably safely say you will be sitting here attending this seminar. There are not many external factors that could come into play to change this. What will you be doing in 3 days? It’s fairly likely that you can tell me what you will be doing in three days. You probably have at least part of it planned out, and very little is likely to change that. Now, let me ask you what you will be doing in 18 months? Or in five years? How sure can you be? Not nearly as sure as you can be when I ask what you will be doing in 5 minutes or 3 days because there are so many outside factors that could come into play. This is the advantage of a trader. As a short term trader, my time frames run anywhere from 5 minutes to 3 days. Long term investors must project out 18 months to 5 years. Much harder to do with any degree of accuracy. Short term traders all understand that they are really just playing the odds, and they know that the odds of being right and making a profit over the short term are greater than those of being right and making a profit over the long term. It is true that 100% accuracy can never be achieved, but all short term traders understand that by using a few simple tools, they have moved the odds into their favor. By operating in the short term time frame and using the tactics we will go over today, and the tactics we teach in depth every day through our Real Time Trading Room a good trader can achieve results of 10% per month or more.

DISCLAIMER: Trading in securities may not be suitable for all individuals. Consult your broker or other professional to determine
your suitability. The discussions provided by Trading From Main Street are for educational purposes only and should not be taken
as a recommendation to buy or sell the referenced security. Past performance is not indicative of future results.

Please visit the Support Center to email questions or comments.

• Home • E-Minis • Stocks • Mentoring / Consulting • Traders' Circle •
• Trader Newsletters • Seminars • Online Course • Stock Scanner • Charting Software • Focus Letter •
• About TFMS • Testimonials • Track Record • Partners • FAQ's • Help / Support • Contact Us •
• Free Trial Membership • Member Login •

© 1998-2003 All information presented is property of TradingFromMainStreet.com and Bastiat Group, Inc.