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A important definition
date 09/14/07 time 9.18 pm
Hi all,
A trader is defined in Websters as
A person who buys and sells (as stocks or commodities futures) in search of short-term profits.
It is clear from this definition that someone must buy and sell a security and they do this in order to make money. It is also clear that the time frame is defined as short-term. That's pretty simple and straightforward.
Of course if it were that simple, we would all be traders. Probably what is needed is a definition of a successful trader. That might look something like this:
A person who buys and sells (as stocks or commodities futures) and consistently makes short-term profits.
All traders desire to make profits and most do, at least occasionally. To consistently make profits, however, is not what most are able to do. The key to trading, just as in any other profession is to determine the successful keys in that field of study. Just like in most other professions, there isn't just one set of keys either. There are many successful methods ... proven methods that make money over time. A number of books have been written detailing the habits and methods of consistent winning traders² and as you can imagine, the strategies, thoughts, preparation, and execution are all very different from trader to trader. There is no one right way to trade ... any one right answer. There are many ways, both successful and unsuccessful. The key is to find a way that fits with your style, your temperament, your time frames, your desires and definitions of success ... then to practice, practice, and perfect.
From the definition of a successful trader we have now identified our trading goals
1. The need to both buy and sell securities
2. To consistently make money in a short-term time frame
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