Stock Trader

Interest in becoming a stock trader has grown as the convenience of online stock trading as well as online options trading has become greater and greater.

A stock trader operates differently than a stock investor in a number of ways. A stock investor will primarily look at the long-term profit potential of the company whereas a stock trader has more of an interest in short-term profits. A stock investor will rely upon fundamental stock analysis for stock research, a stock trader primarily uses technical stock analysis.

Trading stocks can be extremely rewarding when done correctly. Rather than jump on the readily available stock market trading tips that abound in today's marketplace, beginning traders are advised to learn stock trading. Although there are many successful stock traders who are self-taught, some of them would definitely advise you to take some stock trading courses in order to enhance your stock analysis skill set.

Stock traders vary widely in the time frames they trade in. Some may be happier using swing trading strategies whereas others preferably higher-frequency trading such as day trading and scalping.

Anyone interested in stock trading should realize that with increased frequency of trading also comes an increase in transaction costs. This is purely logical because someone who trades 30 times per month is more likely to have higher transaction costs than the stock investor who may hold on to a stock for many months or even years.
Because of the higher transaction cost short-term stock traders must have a stock trading system which takes this into account. As long as the system the trader uses can continue to have a net profit after all transaction costs the trader can see their equity grow continually.

Those who trade stock may use a variety of stock market analysis tools and software that stock investors would not have any need for. One such tool would be an automated stock trading platform. This type of trading platform allows you to have your trades executed for you automatically in a robot-like fashion. Some brokers have this feature built into their platform already. For other brokers an additional software program must be used which interfaces with their current platform.

A stock trader has to also be mindful that because they are working with shorter-term trades that there is less margin for error. Traders have to take into account that the per trade profit that they seek will typically be much smaller than that of a stock investor. Whereas a stock investor can wait years for the stock price to go in their direction, a stock trader simply does not have that luxury.

You can be a successful stock trader with the proper preparation as well as the proper level of dedication. People enter into the wonderful world stock trading every single day and it is those who are best prepared that stand a better chance of long-term stock trading success.