Do you have to specialise?

hey

If you want to learn to become a trader now and for the future

Do you have to specialise in day trading stocks or gold or can what you learn doing 1 be applied to a high degree to another?

Ps. What are the different types of trading and what defines them?


Thanks

There are numerous different types and styles of trading but in an effort to keep this simple I would suggest that the first step would be to learn some generalist areas which are applicable to all trading in general.

The generalist areas that you should be looking to develop a deep understanding of is risk management. Without this knowledge and being able to apply it you have the same chance of winning as someone playing roulette.

Other generalist areas that you should be looking at is trading psychology, some basic economics and statistical probability.

Once you have developed a good generalist base of knowledge then you need to start to look at what segment of the market you wish to attack. Initially it is probably best to choose one area. Lets say that area is FX. Start learning about how FX works and what drives FX markets.

The next area to develop is a specific strategy as to how you will play the markets. I would advise against floating from system to system that you may find but rather give considerable thought to what are the components of a good trading model. The cycle of developing and testing a trading model is time consuming and is very much a discovery and you will learn alot in the process. Most will not put in the time an effort and will end up trying a system and praising it when they make profits and decrying it when it fails and then skip to another system and go through the same routine. This is the path to failure - avoid it like the plague.

Confidence in your system comes from: 1) Knowing what the components of a good system are; 2) Extensive back testing with careful attention to how it fairs in tight range bound markets; 3) Knowing that your risk management strategy is capable of surviving numerous consecutive losses.

Well I could go on but that will do for now.........bottom line is that to become a trader the first (and continuing) quest is one for knowledge.

Good luck in your journey.

Monaco

I specialize in one specific strategy and it's making me a little money.