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In today's economy, it is no longer feasible to just put money in a savings account and expect to gain financial stability. If a person desires financial security, financial experts recommend stocks and mutual funds to secure one's financial future. With the wide spread release of the Internet, stock trading is no longer a professional's game. Blue-collar and white-collar workers alike are getting into the stock game. There is an elite group in today's stock trading world. These masters of the stock market are known as day traders.
Not everyone can be a successful day trader. Successful day traders have latent, almost magical, qualities that allow them to succeed. The tools of a successful day trader are accurate prediction stock trends, fearlessness and superior investigative skills. One could liken a successful day trader to a mountain climber.
A mountain climber must know the terrain and how best to climb it, in order to avoid falling into crevasses. The stock market is the day trader's mountain. Stock values rise and fall sharply, much like the peaks and valleys of a mountain range. The successful day trader must be able to use their accurate prediction of stock trends tool, to be able to sell a certain stock just before its value starts to drop. Conversely, the day trader must buy a stock when it is at its lowest point of value. Buying and selling at the proper point will reap large dividends.
Predictions will be useless to a day trader if they are afraid to act upon them. A successful mountain climber must employ their fearlessness tool. They must have the courage to hold on to a stock in one of its financial valleys if there is a reasonable indication that the valley will soon lead to a massive peak. The day trader must also have the courage to take a loss if a stock appears beyond recovery. As musician Kenny Rogers said in his song " The Gambler", "You " ve got to know when to hold 'em, know when to fold 'em ." Buying a stock at its lowest point of value and selling it at its highest, maximizes profit. If a day trader has a large profit margin, they can accept a few losses.
The key to making fearlessness pay off is the usage of the third tool, superior investigative skills. A stock market mountaineer must have superior investigative skills. Thorough investigation of a stock can reveal whether that stock is a poor, fair or good investment. Investigation of stocks can also reveal trends in their performance, which might be overlooked by an amateur's cursory glance.
Perhaps during investigation of a stock, a day trader might discover that every year the stock's value plummets a week before Christmas and rises sharply again a week after Christmas. A successful day trader would buy that stock at its low point and sell it at its high point every year, thusly acquiring a predictable addition to the trader's stock portfolio. If a mountain climber lacks the proper tools, they will surely die. If a day trader lacks the right stuff, accurate prediction, fearlessness and superior investigative skills, they will never be successful.
Possession of the right stuff will ensure the mountaineer always negotiates the treacherous terrain of the stock market and ends up one of the elite at the top of the financial market. Bibliography:
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Research essay sample on The Right Stuff Day Traders
