Successful traders have a consistent way to trade the market, and have a set of rules which they follow through thick and thin.
There are in fact hundreds of ways to trade the market profitably.
Some people choose momentum trading, others are fundamental investors.
But if they are successful, they have devised their own stock trading systems, and have not copied someone else's.
The reason you need to design your own system rather than take over someone else's is that every potential trader is different.
In order to choose the system that is right for you, you need to ask yourself a number of questions.
First, what are the goals you wish to achieve through your trading? What amount of money are you comfortable about investing, how much time do you have to devote to trading every day, what is the level of risk you are prepared to take and what returns do you expect to make? Short term trading takes more time, more capital and requires more skill than long term trading.
Shorter term trading requires a higher number of trades, so make sure you have a number of hours each day free if you choose this type of trading.
Realize that you can't trade everything.
Pick a market that you are familiar with or would like to trade.
Unfortunately, there is no 'best performing' market.
You need to select one, become familiar with it and then try to master it.
This is the key to success.
You will not be successful if you spread yourself thin and try and master a number of different markets.
There are a number of different markets to choose from.
The following are the main ones from which you need to make your selection.
First, there are stocks.
The most straightforward of all markets is stocks.
This represents a share in the ownership of a company.
Probably this is the best place to start if you are a novice trader.
Start with stocks, and make a profit before you move to other areas.
Options are leveraged instruments that derive their price from underlying securities (like stocks.
) Options introduce the opportunity to leverage your money and increase your profits.
They have a limited life.
Futures are used for hedging commodity price fluctuations.
A greater level of skill is required, but there are greater rewards possible for the skillful trader.
Contracts for Difference (CFDs) derive their price from an underlying security and can be placed on almost anything.
CFDs are popular at the moment because you get to trade both sides of the market, long and short.
Finally, you can choose Forex, short for foreign exchange.
This is where the asset traded is currency.
This market is attractive because of the high leverage potential.
However, you need to establish yourself in other, less complex markets such as stocks, before you enter this market.
Ask yourself the questions mentioned above about your goals and the amount of money and time you have and devise the stock trading systems which are appropriate for you.
Then go ahead and make a choice about the type of market with which you are familiar or you decide you wish to trade.
Then act in a consistent manner and always apply the set of rules that you have established.
Follow these simple steps and you will enjoy success in the market you choose.