I am very appreciative of all the comments about this blog (even the negative ones ;)), but I thought I would give you an idea on why I trade rather than how I trade, and perhaps it will get you all thinking along the same lines as well.
I feel it is just as important to figure out why you are trading as how you will trade. If you can understand the reasons behind your trading, you are one step closer to figuring out which trading style is best suited to you.
For example, let's say you reason for trading is you are bored, and you are looking for some excitement, then more than likely day trading would be your thing, with multiple positions looking for small regular pips.
What if you are in it to earn a residual income while working full time?
Then swing trading may be more your thing, holding positions for a day or two (or sometimes more) at a time, looking for 30 or more pips a trade could be your go as your trading time would be short.
How about if you are short on time and energy but am looking for a long term investment income, then perhaps long term positions are for you, looking at fundamentals and holding positions for weeks or months.
Whatever your reason, if discovered, it can give you a good insight into what style of trading you should be looking into.
As for me, well here are my reason for trading:
- Escape the rat race - like so many, the full time 9-5 (or more) working day 5 days a week is not something I wish to stay with in the long term. I am a great lover of sports, the beach, people and discovering new things, kind of a hard thing to do when sitting in an office for 8 hours a day. My minds eye has me on a pacific island beach updating this blog more than likely.
- Lachlan (pictured) - My new, now 2 month old son, is probably the most precious thing you can imagine, and every time away from him make me feel like I am missing something (which I most probably am), so any extra time I can spend at home is some less I have missed.
- A lifelong dream - I have always, since as long as I can remember, had a yearning to help the disabled, they are special people that unfortunately are mistreated in so many parts of the world. Unfortunately most occupations in this area are usually the lowest payed, and this is the case here in Australia, so to work with them, you need to be financially settled if you want to maintain a family here in Sydney.
My ultimate aim, is to establish a Sports Academy here in Australia specifically for the disabled, but, as you could imagine, it is something that would take a whole bunch of money and even more time, both of which I do not have at the moment.
- This coupled with spending more time with my son are the ultimate driving forces behind my trading efforts.
So what does all that mean for my trading style?
Well, with the above in mind, it became clear I needed two things, firstly time, so short day-trades were out, instead I needed a trading style that would enable me to get away from the charts if needed.
Secondly, of course, fast money, a big reason why so many enter the Forex market with it's liquidity and fast paced profit (and loss) opportunities.
Having realised all of that, I have now developed a trading style that I would call swing breakout trading, which of course probably doesn't make too much sense, but basically means I look for breakouts, and try to hang on to them to see if the develop into a new trend.
If they do, then I am in for a long and profitable ride, if they don't then I close with a quick profit or loss.
So what is driving you to trade? Figure it out and you will probably find your trading style as well.
Here is hoping that the Buy Sell Eat Academy of Sport for the Disabled becomes a reality one day (going to have to think of a snappier name ;).