Best Ways to Make Money Trading

Best Ways to Make Money Trading
By www.ProfitableTradingTips.com

http://profitabletradingtips.com/trading-investing/best-ways-to-make-money-trading
What are the best ways to make
money trading?

The first is to pick something that you
know about.

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Before We Continue…

The second is to develop a strategy.

The third of our best ways to make
money trading is to develop the skill
set needed to buy and sell profitably in
a volatile market.

What Do You Know About?

If you work in the health care industry
you probably know about
pharmaceuticals and devices used to
treat ill people.

If you work in import and export you
know about currencies and how their
values fluctuate.

If you work in the auto, transportation
or restaurant industries you know
about the products and services
unique to that sector.

Pick what you know about as the first
of our best ways to make money
trading.

What Is Your Approach Going
to Be?

If you have a sound appreciation of
the fundamentals that drive stock
prices in a given sector your stock
trading strategy will likely be swing
trading.

Swing trading is when you buy and
sell a few day, weeks or months apart
to take advantage of market changes
based on movement of fundamentals.

Another approach is to trade the daily
fluctuations in the market which
commonly requires technical analysis
of market price patterns.

In this case you do not care so much
about fundamentals as the herd
mentality of the market.

Learning How

Learning how to day trade is one of
the best ways to make money trading.

In point of fact markets repeat
themselves.

You can trade currencies in the Forex
market, stocks on the NYSE or
commodity futures on the COMEX.

In each case there will be market
events that will drive prices up and
down in specific patterns.

Technical traders know that these
specific signals lead to specific end
results.

Traders learn specific signals, practice
them in simulation trading and use
them in trading stocks, commodities or
currencies that they know.

Technical cues such as Japanese
Candlestick signals are accurate in
various time frames from minutes to
hours to days to weeks.

However, the best way to make
money trading with technical signals is
to stick to one time frame and typically
to use your knowledge of
fundamentals to verify the results of
your technical analysis.

Volatility Is Your Friend

Markets are eventually efficient. That
is to say, fundamentals will eventually
set prices of stocks, commodities and
currencies.

However, in the short term markets
are inefficient and this is where profit
lies in trading.

The last of our best ways to make
money trading is to look for volatile
markets.

Ideally you are doing this in a stock,
currency pair or commodity that you
are familiar with.

Long term investors use the concept
of intrinsic value to determine if a
stock will prosper over months and
years.

Technical traders use statistically
derived signals to predict very short
term market moves.

In either case profits are best in
markets that are inefficient and
volatile.

Those who are the best prepared and
possess the highest skill set tend to
be the winners.

Best Ways to Make Money Trading

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