There are investors and there are traders. I fall into the trader category more than the investor category. I've been through the compulsive gambling thing in the past. Been there, done that. I'm not a day trader. I'm more of a position trader. But I would sell a stock as soon as I bought it, if I felt I had made a mistake.
Day trader: Never leave a position open overnight.
Swing trader: From a few hours to a few days.
Position trader: From a few days up to several months.
Long term trader: Hold a position from several months to several years.
Rule #1 is "don't lose money.", Keep a close eye, or close stops on it when you can't watch it. Buy when the stock is moving up, hoping it continues to move up. Sell as soon as it starts to go down, unless it's a small upward correction, requires judgement call.
Each industry requires it's own rules. You wouldn't trade a pharmaceutical stock the same way you'd trade a tech stock.
Where things break down and always fails, is when you don't follow your own rules.
Is trading gamboling? It is at first because you don't know what your doing. But as you gain experience, it becomes more of a skill than a gamble. A good comparison is playing black jack at a casino, where the experienced player would pull back his bet when he sees that the dealer might have a better hand than he has. This is not allowed in the game. But if it were, it would remove a large percent of gambling out of the game.
Work up a system? Yeah, you have to, regardless of what field of work you do. Your results would be truly random without one. This is my system in a nutshell. Go, make money with it. lol.
Edited by CatBrat (10/03/12 04:48 PM)