Common Questions
WHAT IS TRADING?
The dictionary defines trading as a form of exchange that takes place through buying or selling. In the financial world, people think of trading in more precise terms. Here, it is the process of buying or selling a financial instrument (e.g., stock, bond, futures contract) as a result of identifying (1) the direction of prices, and (2) specific price levels at which to enter and exit the market profitably.
HOW IS TRADING DIFFERENT FROM GAMBLING?
Gambling is the act of risking money on an activity that carries a high probability of financial loss. The probability of loss is due to inadequate understanding of the activity itself or factors inherent within the activity that make the likelihood of loss very high.
Almost any financial activity can be a gamble. Consider buying a car, for example. If you don’t know what you are doing, you can become the victim of a bad transaction. Similarly, trading in the financial markets can be very risky if you are unfamiliar with how the markets work. Through proper training, however, it is possible to develop a good understanding of the markets and learn to respond to trading opportunities when the odds of success are highly favorable.
Unlike a casino, the financial markets are much too large, diverse, and complex to be controlled by a handful of individuals. So, the idea that markets are configured to make traders fail is unfounded. Traders lose money not because the financial “deck” is stacked against them, but because they lack the knowledge and skills to play the game successfully.
CAN ANYONE LEARN TO TRADE?
If sufficient time and attention are devoted to the task, most adults can increase their understanding of the financial markets. Since various factors influence how and when trading occurs, each person must decide on the types of trading that work best. Overall, results do vary, just as the results of participating in any endeavor will differ in accordance with individual aptitude and effort.
MUST I LEAVE MY CURRENT JOB TO TRADE?
Certainly not. Trading is an activity that appeals to individuals from many different walks of life. It can be carried out occasionally (a few times per year), regularly (several times per month), or frequently (many times per day). So, whether you have a job or not, trading is a possibility.
HOW CAN I BECOME A SUCCESSFUL TRADER?
Learning to trade successfully requires time, money, discipline, patience, flexibility, and a willingness to obtain the understanding necessary to perform well. Since trading is a skill-based activity, good training and mentoring are essential for development.
Success also requires humility. Trading tends to attract independent people. While some independent judgment is necessary for trading, a stubborn resistance to change, preoccupation with “making things happen,” or need to feed off of market action drains a trading account very quickly. Successful traders adopt a responsive posture toward the markets rather than assuming that market activity should bow to their wishes or meet their emotional needs.
WHAT CAN BRIGHTSTAR TRAINING DO FOR ME?
We do one thing—equip traders for market success. Whether you are new to the game or have some trading experience, we will work with you to facilitate improvement of trading skills. A variety of learning opportunities are available. Nonprofessional traders with interests in day, swing, or position trading are especially welcome.