Your Trading Style

Developing your own trading style is of course one of the first steps to actually trading. You cannot simply get someone else’s trading system and make it work for you because it may not fit your needs. Every person is different, and that works its way in the stock market as well.

Before you start to trade ask yourself these questions.

1. How Often Do I want to trade?

Do you want to be trading in very short time frames such as a few minutes or a few hours? Or do you want to have a much larger time frame such as several days, weeks, or months. Some people may not like looking at the screen every day; others may think it is the best way.

Me personally I like to trade daily charts so all I have to do is adjust my position 5 minutes a day and walk away.

2. Homeruns or Base Hits?

The next thing you have to decide is whether you want to shoot for those home runs that may come only a few times a year, or do you want more consistent, but smaller gains. This comes down to how well you can handle losing.

If you are shooting for homeruns you might be wrong more often than if you are shooting for smaller gains. Can you deal with that?

3. How much do you want to risk

Everyone has a different risk tolerance. And even though it is always a good idea to risk a very small amount of your portfolio on any 1 trade, the definition of small may be different for different people. Some may consider 1% of their account to be the maximum risk, while others may consider 5% to be it.

It all comes down to how well you can handle risk.

To learn about the different types of stock traders visit http://www.stocks-simplified.com/stock_market_traders.html

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