Are the Markets Tradable?

There seems to be some confusion whether or not the stock market is actually tradable. Everyone knows about buy and hold, but when they hear the words short term trading it is like taboo.

The short answer is yes, the markets are tradable. It is possible to make a fantastic return from the stock market not by buying and holding, but by trading
it.

There are two keys to successful trading. By looking at both of them it is possible to get a hold of this trading thing and profit from the market in the short term.

1. Risk and Reward

Every successful trader looks at the risk and reward of every position they take on. This way they can manage the risk and only take risks that they believe are actually worth it.

By looking at the risk you can manage each trade so that you only lose a small percentage of your account per trade if you are wrong. This is very important because no matter how good you get losses are always going to be a part of the game.

In addition to looking at the risk it can also be very important to look at the reward of each trade. Taking on trades with a much higher reward then risk can mean that you do not have to be right often to be profitable.

2. Keeping a system

The next important thing is managing a system. Without a system it is hard to develop any kind of accuracy. If you are trying to swing trade a stock and then switch to trend trading it that can really throw you off, and ultimately hurt you in the long term.

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