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What is a Trader ?

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The formal definition of a trader in Investopedia is “An individual who engages in the transfer of financial assets in any financial market, either for themselves, or on behalf of a someone else. The main difference between a trader and an investor is the duration for which the person holds the asset. Investors tend to have a longer term time horizon, whereas traders tend to hold assets for shorter periods of time in order to capitalize on short-term trends.” Source: Investopedia – Trader Definition

To summarise, trading is an active style of participating in the financial markets that seeks to outperform traditional, longer-term, buy-and-hold style investing.

Whether you’re a personal trader, trading for an additional income or working as a trader for propriety trading firm or company, there is one key aim every trader has… to be consistently profitable over the long-term.
Notice I did not say to be profitable on every trade, or to not have losses, or to win more trades than you lose. As a trader the primary goal is to be consistently profitable over the long-term however complexities and confusion can arise as there is no single formula for trading successfully.

Trading is not only a business that MUST have a defined and proven plan to follow, that we know has a clear positive expectancy, but this plan must also be tailored to suit your own personality and risk tolerance.
Expanding further, being a successful trader, is not that different to running a successful business, playing professional sport, or being successful in your chosen profession, to be consistently successful/profitable over the long run they all need:

  1. a proven plan or strategy to follow
  2. patience and discipline to follow your plan (both in the learning phase and as a professional)
  3. ability to objectively review your progress and make adjustments when necessary
  4. being mindful of your surroundings and the nature of the industry you’re operating in.

The importance of the above statement must not be underestimated and will be expanded on in further blog posts, however for now the key “take away” point is that there is a formula and implementation framework to be a successful trader and starting off on the right path is critical. Without a proper plan and implementation framework you are destined for failure, however as one of my blog readers I aim to at the very least put you on that road to success.

Please connect with me to ensure you never miss a blog post as I share with you the foundations required to succeed in this challenging but rewarding industry.

The post What is a Trader ? appeared first on Stuart Young Blog.


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