Participation in the share market can defined into two groups of activity: Investing and Trading.

An investor buys and holds shares with the intention of long-term capital growth and/or dividend income. A trader buys and sells shares more frequently holding positions for much shorter periods to take advantage of short-term price fluctuations. The objective of trading shares is to produce an "above average returns" on your money.

Traders are more hands on in the market, and trading requires more commitment than investing. HomeTrader teaches traders with a trading strategy that they should only need to spend 30-60 minutes trading a day. Share trading is about how to develop a system to make your own decisions and control your own financial future, with your own money. Traders work to be free of the advice of brokers and others and make their own decisions.

Follow these links to read about the trading stories of real HomeTrader clients and view their trading results. For more information attend HomeTrader’s FREE Intro Seminar.

The Skill of Trading

Trading is a skill that once acquired, remains with you for the rest of your life. It is a skill that you can pass on to your children. Traders can always have peace-of-mind knowing they can create an income without having to rely on others.

The first goal of trading is not to make money, but rather to implement and adhere to a proven strategy. Making money is an effect (albeit a good one) of a successful trader using their system.

A trading system can be traded with an expected result. The result is expected because you are adhering to a set of rules that have brought about the same result in the past. How do you know this? Because you can test the system over years of historical data to see how it performed had you traded it in the past. You can do this without spending any money.

If you apply exactly the same rules day by day, the system might return the same result as it has in the past*. This approach allows for an easy and stress-free approach to trading.

A Trading Strategy

Success as a trader requires that you have a business plan. A trader's business plan is known as a trading strategy. It defines how, what and when you will trade and to what value.

The trading strategy is a set of you own rules used to define your actions given any circumstance that might arise. By following this set of rules precisely you remove factors such as emotion, gut feel, tips and rumours, which generally contribute to losing money. The key to success is a properly implemented trading system, not subjective decisions based on someone's opinion of what to buy and sell and when.

A trader will often use the following elements in their strategy:

• Identify preferred times to trade shares including when to enter a new position, when to close an existing position, and importantly when not to take any action and wait for a better opportunity.
• Gauge the relative strength of buyers and sellers (i.e. market sentiment).
• Develop a theory as to how far the share price may reasonably be expected to move (i.e. price target).
• Formulate and consistently employ risk management for every trade taken.

Most people’s major concern when getting into the stock market is what shares to choose. A trading system will give you the answer to this. Trading is not an art, but rather more like a science. Trading decisions should not be made by an individual they should be made by an individual’s trading system.

Click here for more information on trading strategies or register for HomeTrader’s FREE Intro Seminar.

It is important to mention that the rules or system that you use must be suited to you and your financial needs and circumstances. This is the first issue to be dealt with in the construction of a trading system.

A Trader’s Perspective

Australian share trader and now HomeTrader trainer, Joel Green, has achieved enviable results in the HomeTrader Gun Trader competition. The competition is open to those educated by HomeTrader and highlights the returns that are achievable by educated traders using their own defined stock market strategies.

Here is what Joel has to say about trading the stock market.

"I joined HomeTrader in July 2002 - 3 months later I had put together my first strategy.

The stock market can seem a gamble to many people. People are wondering what to do in the current market downturn. Empower yourself with a strategy so you know exactly what to do, whatever the market throws at you, before it is too late.

Emotions must be overcome in order for people to safely and consistently make the returns they are aiming for.

Three approaches are common:

1. Rely on other people’s tips
2. Buy a bunch of shares and hope to get rich
3. Avoid the stock market altogether

I took the first approach before I went to HomeTrader. They taught me a new approach. They mentored me while I developed my own strategy with easy to follow rules for buying, selling and managing risk. I had a system I could test before I spent any money to see if it made the returns I wanted. If you had told me you could develop and test a strategy for the stock market 3 years ago I would have laughed at you.

The best piece of advice I can offer, is get a good quality education. Learn how it works and do not take chances with your money.

Avoid myths such as the belief you must stay away from the share market because prices can go down. This is nonsense; with an education you can learn techniques that people use daily to make money from falling share prices.

Australians should consider developing their own trading approach to make their own investment decisions and control their own financial future, with their own money.

If you don’t get an education and develop your own system, and receive ongoing mentoring, you’ll never know what you can achieve."

To find out more about how Joel developed his trading system, come along to a free introductory class. Click here for dates and times in your city.

* Past performance is not a guarantee of future results. Trading involves the risk of loss and may not be suitable for you. Please ensure you understand the risks of trading leverage products as detailed in the paragraph on risks. All information contained in this website, our documentation, software and training materials is general in nature and should not in any way be considered as personal advice. The decision to invest or trade and the method selected is a personal decision and involves an inherent level of risk, and you must undertake your own investigations and obtain your own advice regarding the suitability of our products for your circumstances.