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Why Trade?

Posted in Traders' Delusions, Submitted by Trading Critic on Thu, 2006-07-06 14:27.
Why traders trade the worldwide forex and stock markets

I've spent the past week just pondering what to write for my first "real" blog post after posting up my reasons why I set this blog up. I could start off with a "What is trading" post, but you wouldn't be here if you didn't know what trading already was. How about a post about "Where is trading?" Trading is everywhere. Retailers buy off suppliers, hoping to make money on the buy low sell high principle. But the scope of this website is trading the equity markets such as stocks and foreign exchange in markets all over the world. "When can one trade?" With the power of the Internet, there is always a market open for trade anytime for at least 5.5 days of the week. "Who trade the markets?" Financial institutions and private/retail traders like me. "How do you trade?" I'll be delving into the answers of this question throughout the life of this blog. Simply put, traders make money off the difference of the entry price and the exit price when they trade some equity. We've briefly looked at the What, Where, When, Who, How of trading, now we finally come back to the central question, "Why trade?"

Why so much emphasis on the why?

First of all, why am I placing so much emphasis on the why? Your own reasons for trading are important in successful trading. You must always remember the reason why you trade whenever you put forward an order. When you lose sight of your goal, you risk losing yourself in trading. You must be asking... "what the hell do you mean by that mumbo jumbo?"

Trading is sometimes closely linked with gambling, and I’ve argued before that trading is gambling (with a twist). And for this reason, you, the trader, must tread with caution in every trade you make. To ensure that you don't ever turn your trading into pure gambling.

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