1. THERE IS NO "ONE SIZE FITS ALL" best way to trade the
markets. Some of us are better suited for
2. short-term trading; others better for long-term trading.
3. One of the first and most important steps
you, as a trader, must take in order to be successful is
4. to know yourself. You must be realistic about what you can and
cannot do. You must be aware
5. of your ingrained conditioning as well as any strong personality
traits. You must accept your
6. tolerable risk levels as well as your profit desires. In other words, you must know yourself.
8. If your objective were to become a professional athlete, the first
step would be a realistic
9. assessment of physical traits and athletic abilities. If you are
on the short and slow side, basketball
10. would be out of the question, regardless of personal desires. If
you are on the frail and passive
11. side, then linebacker in the NFL would be unattainable, regardless
of wishes. If you are on the
12. large and muscle-bound side, becoming a successful marathon runner
would probably be out of
13. the question.The point is that regardless of what your or my
personal desires might be, for us to
14. be successful we need to put realistic self-knowledge above
personal desires.
15. The same is true when determining what type of trader you are best
suited to be. Do a realistic
16. assessment of yourself; know yourself. Some of us are best suited
for long-term trading, others
17. for short-term trading. For example, long-term trading requires
great patience and "deeper pockets"
18. (meaning having significantly more margin per contract since
trades need to be given plenty of
19. room to work). While on the other hand, short-term trading does
not require much in the way
20. of patience and can be done on a tighter "budget" (since
stops can—and should—be fairly close].
21. Short-term trading involves significantly more decision making
than long-term trading; therefore,
22. to do it well an individual must have a much greater tolerance for
mistakes. Conversely, you
23. cannot expect to be a successful long-term trader if you are
inclined to be quick to get out
24. whenever a trade moves somewhat against you. Additionally, you
should not try to be a shortterm
25. trader if you have difficulty pulling the trigger on trades. The
point is that different "time
26. styles" of trading require different personality traits and
characteristics. Therefore, it is essential
27. to know yourself and then choose the time style of trading that
best suits you, regardless of
28. which type of trader—short term or long term—you would like to be.