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Keeping long and short term trades

Keeping both long and short term trades can benefit you in many ways.  It can give you all the benefits of short term trading with some of the safety from long term trading.

Keeping both long and short term trades can benefit you in many ways.  It can give you all the benefits of short term trading with some of the safety from long term trading.

Many experienced traders will keep both long term investments and short term trades out at the same time.  This allows them to play it safe with the longer term trades and buy strong long term companies while at the same time it allows a trader to attempt to make huge returns by trading the short term moves in the market.

Diversifying between long and short term trades can become even more important when you are just starting out.  This way it makes it harder to make a few bad mistakes and lose all of your money.

The amount of money you put into long term vs. short term plays can vary widely.  If you are very conservative you might want to have 80-90% of your account in the long term while having only 10-20% in short term plays.

If you are more aggressive you could decide to flip that and put 80-90% into short term trades.  Or split it right down the middle half long term, half short term.  Every trader is different. 

What is important however is making sure that you keep these trades separate.   Do not try to turn a long term trade into a short term trade or a short term trade into a long term trade.  You may even want to open up separate accounts.

It is not a necessity to have both long term and short term trades but it can help you to have the best of both worlds.  Almost any stock that is worth buying will be trading for more 10 years from now then it is trading nowScience Articles, and going after short term gains can often make higher returns then holding for the long term.

For more information about the stock market visit http://www.stocks-simplified.com

Source: Free Articles from ArticlesFactory.com

ABOUT THE AUTHOR


When I was young I wanted to learn how to trade the stock market.  So I traveled around the country listening to professional traders talk about how they are making money in the market.  After trading for a while I understand how easy it is to make money in the stock market and started a site http://www.stocks-simplified.com to help others learn.



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