Editor's Note: Most traders sabotage themselves before they even place their first trade. They jump into strategies that completely clash with their personality - day traders trying to hold for weeks, patient investors scalping quick moves. The result? Frustration, losses, and constant second-guessing. Which is why today's guest article from Oxford Club's Chief Income Strategist Marc Lichtenfeld is crucial reading. Marc went from making split-second decisions on a professional trading desk to building "Perpetual Dividend Raiser" portfolios that compound for years. Now he's revealing his three-question framework to help you stop fighting your natural trading rhythm and start working with it. Plus, Marc is also hosting a "Special Situation" event this Wednesday, Aug. 6 where he'll be revealing a new strategy that has a 100% win rate so far. I know that sounds too good to be true - but Marc has the stats to back it up. Click here to sign up for Marc's "Special Situation" event for free. - Ryan Fitzwater, Publisher
Marc Lichtenfeld, Chief Income Strategist, The Oxford Club Dear Reader, In my 20s, I started out on a trading desk where traders rarely held any positions overnight. They were day traders who got in and out of their positions in a matter of hours - and sometimes minutes. As my career evolved and long-term investing became my focus, I shifted my goal to owning "Perpetual Dividend Raisers" for multiple years. Now I find stocks that my readers should be able to hold indefinitely as the companies raise their payouts every year. The Appeal of Quick Trades vs. Patient Investing But that's investing. On the trading side, it's appealing to be in and out quickly. With some stocks, you have to wait a few weeks for a catalyst or technical pattern to play out. And that's fine. There's nothing wrong with earning double- or triple-digit returns in a few weeks or even months. Most investors would be thrilled with that kind of performance. However, some traders enjoy the action and don't want to wait weeks for the payoff. They prefer to be in and out in a matter of days - sometimes within the same day. The Hidden Benefits of Short-Term Trading While trading is more speculative, there are some risks with long-term investing that are eliminated with trading. For example, you don't have to worry about getting overly attached to a stock because you've held it for a long time or because you believe in the story surrounding it. Understanding Different Trading Timeframes Intermediate-Term Trading Intermediate-term traders typically own stocks for a few weeks or longer. They're waiting for a story to play out, such as an earnings report, a drug approval, or a completed chart pattern. They'll usually set stops that give the position some room to move. That way, they won't get shaken out by market noise, but they also won't suffer too large of a loss if the trade goes against them. Shorter-Term Trading Shorter-term traders will hold a stock for a few days or less. They're usually exploiting strong moves in the market or in the stock itself. They'll typically take smaller (but perhaps more frequent) losses in exchange for more frequent trading opportunities and wins. |
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