c15 JWBT016-Busby October 9, 2008 9:21 Printer: TBD
CHAPTER 15 Stocks and ETFs
T
he financial markets offer many ways to make money. Some traders
master the art of trading stocks, while others concentrate their efforts
on futures or bonds. I trade all of these, and much more. In addition
to the various products that can be traded, there are also many styles and
methods of trading. That is, some traders enjoy day trading, while others
see the day trader as a gambler and avoid all associations with that partic-
ular trading methodology. Many of these folks tend to be in the market for
the long haul. They buy and hold their positions for years and never exper-
iment with any other trading strategy. Then there are swing traders, who
fall somewhere in the middle of these two extremes. They buy and hold
for days, weeks, or months but do not retain positions for the long term.
Money can be made using all of these approaches. However, you need a
strategy that works.
People in the industry like to classify everyone. Many people refer to
me as exclusively a day trader, but that is not true. Personally, I do not be-
lieve in labeling. I think that the market should tell you when to get into
and out of a trade. Sometimes that means that you buy and sell in the same
session. Other times, that means that you buy this year and sell years from
now. If the trade is working and paying you, keep it. If there are no profits
or there are losses, consider getting out. Every trading day I look at prices,
and generally I trade. In that way, I am a day trader. However, I also hold
some positions for weeks or months and I hold others over the long term.
I never use a buy, hold, and forget it strategy. Prices change, market condi-
tions shift, and traders and investors must stay abreast of those changes if
they want to make money.