There are longer forms of ‘trading’ such as ‘Swing Trading’ or ‘Core Trading.’ The only difference is the timeline. Day traders are in and out many times a day, whereas a Swing or Core trader will hold their positions for much longer periods of time, sometimes even years, similar to the average fundamental based long term investor. Most day traders use a process called ‘technical analysis’ to choose the stocks they are looking to buy, whereas the average investor primarily uses fundamental analysis, which we’ll talk about in a bit.
DAY TRADING. THE BASICS.
There is a lot of talk that day trading is no different than gambling. Nothing could be farther from the truth. In actuality, ‘proper investing’ is more akin to gambling than trading is. Let me explain.
Technical analysis trading is based on the use of specific chart patterns tested over long periods of time that increase our probabilities of making money, and to make these probabilities work in our favor we must be CONSISTENT with our approach. The reason trading gets a bad name and is often likened to gambling is because many so called traders are NOT consistent in their approach. They take random trades, with random levels of risk and have no real edge. A professional trader always has specific patterns they trade with very detailed risk and money management which leads to a positive expectance, which leads to making money consistently. This is how we gain our edge over the market.
