Trading: The ClayTrader Definition
In order to succeed and have consistent profits with stock trading, it is important you understand exactly what the concept of trading actually means. Definitions vary, but in my experience, what most people desire with trading – and what I focus on here at my site is:
Learning how to trade stocks to either create additional income, or to replace current income with the goal of kissing your “day job” goodbye.
This is accomplished by taking advantage of strategies and systems that allow discipline, risk management, and cash flow to take place in very time efficient ways.
Investing in Stocks vs. Trading Stocks
What do I mean by time efficient ways? Simply stated, trading is NOT the same as investing.
Investors hold stocks for very, very, very long periods of time, and therefore, do not gain any immediate cash flow.
Traders hold a stock for no set amount of time. Essentially, as long as it is making them money, they hold. This could be for a few minutes, a few hours, or a few days.
In other words, investing is a way to build for retirement, but you will not be gaining any immediate income and will still need to “go to work” every day. Whereas, trading (when done correctly, of course) can put immediate and consistent cash flow into your pocket over and over and over again.
The ClayTrader Business Model
In the video below, I describe exactly what my trading business model looks like. As you will see, I have three goals for you that are the foundation of what I want to achieve with you in order to maximize your potential as a trader.
Let’s discuss some myths and set realistic expectations before you continue on your journey.
- Trading is the same as gambling.
Technically speaking, crossing the street is “gambling” since you could get hit by a car. What is a great way to increase your probabilities that you do not get hit by a car? You do what you were taught as a kid and you look both ways before crossing. The same is true for trading. By learning the proper strategies and putting a set of rules in place, the probabilities of making money can be put in your favor. There is proof that trading is not gambling as I show HERE.
- A college degree is needed for trading success.
This could not be any further from the truth. If you can count to 100, you can trade stocks. I’m not saying the stock market is an easy place to be; however, when it comes to trading, the most important thing is your desire to succeed… NOT college degrees. If you’re still not quite convinced, then watch THIS video. If you can understand the math, you’ll be good to go – no degree needed.
- Trading is a great way to “get rich quick”.
I don’t advertise, teach or believe in get-rich-quick schemes. Nothing in life comes easy. Trading is no different. Many “trading gurus” will try and persuade you to think otherwise. Why? Because they’re trying to make money from false hope. It’s basic marketing: sell the dream, NOT the reality. I’m here to give you reality: trading takes effort and dedication. I will do my best to guide you and give you the information you need, but I can’t force you to take action; that is all up to you.
- Trading requires a large amount of time.
I would be misleading you if I said no time was required, but after you move beyond the learning phase, the time commitment truly does dramatically decrease. Yes, you will always need to spend time locating the trades to make, but the thought of sitting in front of your computer for hours upon hours is just not accurate. Having a trading strategy and rules will still allow you to have plenty of freedom in your everyday life.
- Trading is a very stressful way to make money.
I keep talking about trading strategies and putting rules into place… and this is exactly why! For people that do not invest into training to develop proper trading techniques and strategies, trading can indeed be a very stressful atmosphere. On the other hand, for people who do make an investment into their education and learn to put a set of rules into place, they feel in control which leads to confidence, not stress. In fact, if you are interested, I am currently offering a training event on this very topic. It is 100% free. You can learn more HERE.
- The first thing I need to do is sign up for an online broker.
I get it. You want to be a trader. In order to be a trader, you need an online broker – therefore, the first thing you need to do is open up a broker account. This is 100% logical, but unfortunately in the world of trading, the logical thing to do is not always the right thing to do. Believe it or not, opening an online brokerage account is one of the last things you should be doing. Like any profession, you first need to learn how to properly do it. Would you give a loaded gun to a child? Of course not! So why would it make sense to have a brokerage account as a “child” when you don’t know what you’re truly doing? Another way to view this concept can be seen in this analogy video below.
Types of Trading: Flexibility
The great thing about the market is the flexibility it gives to those who are interested, especially in regards to trading. There are two primary “styles” of trading, day trading and swing trading. What is best for you? Only you can answer that, but two helpful areas to consider in helping determine this are your time availability during the day along with your personality type.
A day trader is someone who profits by making quick trades throughout the same day. Stocks (or options, Forex, futures, etc.) can be bought and owned for as short as only a few minutes to a few hours before they are sold again. Most times, the trader will be back where they started when the day first began, having zero dollars in the market. This style is great for those who can be near a computer during the day and for those who have more of an aggressive personality type and lower amounts of patience.
A swing trader is someone who profits by making trades throughout the period of a few days (in some cases, a few weeks). Stocks (or options, Forex, futures, etc.) are usually bought and owned for at least a few days. These positions still need to be monitored each day; however, the “buying” and “selling” will not be done as often. This style is great for those who cannot be near a computer during the day and for those who have more of a laid-back personality type and greater amounts of patience.
I’m Ready to Start My Journey to Success! But Now What?
There are three steps I want you to take in order to get started on your journey in the best way possible.
Sign up for my free newsletter. Not only will this keep you up-to-date with the free content I provide, more importantly, it will keep you on the right path to success in your trading journey.
Unlike other online newsletters, I am NOT paid to talk about certain stocks. You will never receive a “the next big/hot stock pick is…” type email. You can unsubscribe from my newsletter at any time, but I promise to always give unbiased content.
As a thank you, you’ll get instant access to my very popular resource guide, The 5 (Dirt Cheap) Tools I Use To Find Stocks To Trade (Including 3 Completely Free Tools). It is a very easy read that details the tools I use everyday.
Just click here to enter your email and you’ll get a copy of it right away.
Invest into your education by learning how to read stock charts and identify patterns.
As you’ve heard me repeat over and over, in order to have consistent and profitable success, you need to develop a strategy and implement rules to follow. Trading is all about managing risk and being disciplined (like in karate), and when you know how to read stock charts, these two concepts become much easier to put into practice. Be sure to visit the training section of my site HERE.
Is investing into trading education something I truly believe in, or is it just a sales pitch to try and get you to buy a training course from me? I’ve addressed this question, with proof, in the video below.
I already touched on this earlier, but please make note of what Step this is. This is the LAST STEP in the process of getting involved in the markets. You need to be able to buy and sell stocks whatever it is you are trading (more than likely “stocks”). In order to do this, you will need an online broker. The good news is, in this day and age it is very easy to get set-up. All brokers have applications online that you can fill out and get immediate acceptance. If you are not sure what broker you should choose (I understand, there are many choices), you can click here to go to my Resources page where I give some opinions. I also have a more in-depth write up HERE.