The world of trading can get very complex because the financial markets are complex. There thousands and thousands of successful traders out there today. The amazing thing is that they all have carved their own niches and approach the markets in a unique way. This should be wonderful news for beginning traders because it demonstrates that there are thousands and thousands of different ways to proper in the markets. It’s just a matter of discipline and finding the approach that suits your style and personality. With all that being said, new traders must begin somewhere, so let examine some basic terms and approaches to the markets.
Going Long – This means that you’re betting on the instrument (stock, future, option, etc) to go up and that you want to buy. You purchase the financial instrument, watch it rise and then sell it for a profit. Profit are realized when you buy low and sell high. It’s also known as taking a long position.
Going Short – This means that you’re betting on the instrument to go down and that you want to sell or take a “short position”. A short position is closed out by buying those shares back or “covering” your position. This concept is very confusing to new traders because you’re selling something that you don’t even own. The thing is that you’re still trying to buy low and sell high, you’re just selling high first and buying low later. Think of it this way – you go to a car dealer and order a new car, he charges you $20k and then looks to purchase it for a lower price. That dealer has taken a “short position” on the transaction between you and him. We don’t recommend new traders to take short positions until they learn more about the market.
One thing to keep in mind about short and long positions is that they’re totally different in nature. There are by far more traders out there taking long positions than those taking short ones. Human nature tells us that we buy with the expectation of rising prices. The concept of wanting prices to drop is against human nature and therefore short positions can be more erratic as a result.
Cultivating a Prosperity Mindset: The Foundation of Wealth Creation – Part 1
Creating wealth is more than just crunching numbers and setting financial targets; it's a deeply personal journey that starts from within. Our relationship with money is shaped by our upbringing, cultural background, and individual experiences, which can either propel us towards financial success or create barriers that hinder our progress. To truly build wealth, we must first understand and enhance our prosperity consciousness, aligning our thoughts and actions with the abundance we seek.
Building Wealth: It's An Inside Job – Part 2
Let’s quickly review the principles discussed in the first part of building wealth. We established that prosperity consciousness must first be developed mentally to acquire any real wealth. A person that constantly worries about money most likely is living in scarcity consciousness regardless of the size of his or her bank account. We talked about some methods and daily exercises that can be employed to start developing a stronger level of prosperity consciousness. The first exercise uses written affirmations, the second utilizes visualization, and finally we need to become more aware of how willing we are to give and receive prosperity on a daily basis. If we start using these methods, we’ll begin to see gradual changes in our lives that will become larger over time.
Successful Trading – Taking Profits - Part 2
Suppose your position has made a big move and you moved your stop to your purchase price as recommended. Then let’s say your stock continues to make a big move and now we’re asking again the questions we asked back in the first paragraph. The first profit taking technique you can use is a trailing stop. If you moved your stop to your purchase price, then you’ve already used a trailing stop. Now you can continue to move your stop up as the price rises until the market “stops” you out of the position. So in essence, what you’re doing is letting the market decide when to take profits.
