The Road to Successful Trading

Day Trading was very popular during the Dot com era and is considered to be dangerous. 
But on the other hand, because you are not holding positions overnight, you eliminate the 
risk of large overnight movements which could go against you and also has less margin 
requirements compared to Position and Swing Trading. 
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Scalping is essentially capturing very small moves during the Day Trading timeframe but 
holding trades from as little as seconds to minutes. This would be suitable for professional 
traders rather than beginners. 
All successful traders have learned that the key to their own success is to find a trading style that 
best suited their own personality. Deciding on which one of these styles is suitable for you is a 
matter of study and experimentation.
Using the paper trading account to experiment with will help define the mechanics of the system but 
until actual trading with real resources takes place, the emotional impact of the style can’t be 
measured. For example, you might like to scalp but you find that the continual need for constant 
vigilance does not match with your goals to have more free time. This is why it is necessary to take 
a holistic approach to defining your trading goals.
So, rather than trying to find the best system, try to find a style of trading that suits you. Keep in 
mind that you might think it suits you but until you have actually traded, you might not understand 
the full implications of what a particular style might present.
Deciding on which is the style best suited for your needs will play an important part in what 
technical and fundamental indicators and parameters you will use in analyzing potential trades. 
Many of the same technical and fundamental indicators and paradigms are used for each style but it 
is much more a matter of timing the shorter the trading period. All styles require analysis; however 
short term trading (Scalping, and Day trading demands a more engaged relationship with the 
investment vehicle.
Many traders trade only a few select investments as they become experts on the particular 
characteristics of the investment and the market. For example, trading the same investment vehicle 
allows the trader to become more in tune with small variations in the way the instrument trades and 
this fact can provide a “momentum signal” which is not as obvious to follow as technical analysis.
In other words, short term traders (Scalpers and Day traders) are much more momentum traders 
than the fundamental-technical traders. Some may feel that this makes it easier for novices to avoid 
the months of hard study needed for the longer time frame styles of trading. But it is always 
preferable to know more than less about what you trade and short term trading can be more trying 
because of its intensity.
It is not the purpose of this book to go into detail about how to trade but rather how to prepare to 
trade. However, regardless of what style a you may choose, the more compatible it is with your 
goals and personality the greater your chances for success.
Again, there are few careers that can actually offer the potential wealth and freedom that trading can 
offer. In today’s digital world, trading on information is perhaps one of the best ways to make 
money using the benefits of the information age. But like all things worthwhile, it does have a price.
How to Design and Construct An Effective Trading Plan 
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It starts here. It starts with a plan and leads to details of how to make it happen. When you build a 
home, you don’t just go out and start building. So, take your time and do it right; start from the 

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foundation and build upwards. 
Developing an effective trading strategy is essential in helping to focus the trader on the most 
appropriate investment vehicle and markets in which they trade. This does not mean that a trader 
should be limited to just one strategy. There may be times when the nature of the market changes 
and may demand a different strategy. For example, a volatility trader may move from one market to 
another as the volatilities change. Or, just by rotating strategies, a trader may keep from getting 
bored or develop new learning about new opportunities. Recently, the Philadelphia Exchange just 
introduced currency options, which allow traders to now combine the benefits of currency and 
option trading. For the novice trader, however, it is probably best to begin with one strategy that is 
most appropriate for the trader’s goals and become an expert using that strategy before broadening 
strategies. 
How to Design and Construct An Effective Trading Plan 
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