Stock trading is a game, not investing strategy
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Stock traders and investors look for profit but from different causes even from the same share. A professional stock trader has many advantages, but is no different from a tomato seller, taking profit from market demand and supply imbalances.
Stock investing involves taking a long-term position based on future profit potential of the business. A share purchase decision is motivated prospective share growth and dividend in both short and long run.
Stock traders profit from panic moves by green horn investors, who regularly transfer wealth when reacting to new market information.
For example, on the current price wars among mobile telecom companies in Kenya, only mature investors educated on the prospects of the share, will take informed positions.
A stock trader must master several skills before taking risk and have the mental state to maintain discipline. If you are not disciplined, you will spin your wheels giving away profits or distributing your cash away.
Trading can be successful if you follow the rules and guidelines. Trades made based on guts or on exceptions to their trading rules go wrong. Successful trading is about maximising probability; and discipline is the cornerstone.
Then there are intermediate and advanced technical skills to learn that will help in understanding the basic tenets of technical analysis. These will help in maximising the probability of a winning trade without which, your chances of becoming a successful trader are low.
Your ability to read stock price charts and understand market jargon is essential. For example, understanding candlesticks, mastering stock price trends, support and resistance levels.
New traders should first hone their skills in the virtual world, through most online brokers at no charge.