Trader, according to defining dictionary, is the worker of broker company, bank or other financial structure directly participating in exchange trade.

However, most traders in the real life are people, working for themselves and risking only their capital. Traders take special pleasure in the process of trade and profit g ai ning "from air".

Why is the profession of trader so attractive

? Foremost, he is his own master: live where you want, work where you want and there are no chiefs you should report to. Moreover, the game on financial markets gives a chance to earn a lot of money for the very short period of time, relying upon own knowledge and experience. Here grasps gambling, but everything depends not on occasion, but on a trader. Knowledge and experience exactly determine efficiency of operations conducted by a trader and, accordingly, the size of gained profit.

Sense of trader's work consists in profit gaining from conducting of speculative operations on different markets with any instruments traded on exchanges (oil, gold, wheat, coffee, orange juice, securities, derivatives, indices etc.).
Sure, all advantages of trader's activity make this profession rather attractive. But facts warn. According to recent researches, more than 90% traders lose all money invested in

trade. What is the proble m

?

Foremost, the thing is that the majority of traders do not have a clear plan or trade method,

jump over from one plan to another, from one system to another. Ask any experienced trader: what are the key factors of success in trading? And the majority will answer: discipline and method.

It can seem obvious. Many traders-beginners think: "And what do they all repeat over and over again about discipline and method? I know that discipline is important to avoid great losses and following a method will allow me to gain income regularly". But in practice novices underestimate the real situation on the market. In fact, a trader does not simply stand apart and watches what is going on the market.

He is a p

articipant of this well-organized chaos. And together with the market dynamics there is his own dynamics: he recognizes a situation on the market and concludes transactions.

Trader's whip is the feeling that a market passes by. He feels unsure, when does not take part in trading, while a market rages. If it continues long enough, a trader, as a rule, does not stand and draws into trade. But it frequently happens in the moment when a market begins to impede and turn in

the opposite direction. A trader is nervous: "Why does IT always happen exactly to me?!". Because a trader fell under crowd' s pre

ssure and stopped being himself.

Main features of the market: quickness of motion and unpredictability. It is, mainly, dynamics and psychology of a crowd. And psychology of a crowd always destroys discipline of a trader.
Remember that crowd always deprives you of independence. In trading it inevitably leads to the losses. Only following the clearly elaborated method helps trader to detach from a crowd and does not allow emotions to influence his decisions.

What risk can trader accept for achievement of his aim

? In many books on trading you will find reasoning on this topic. There are formulas which determine an optimal risk and size of a lot necessary for trading on the basis of the set capital size and success level of the chosen strategy. And all that leads to exact figures – what maximal risk a trader can allow in every specific transaction. All organizations, using the salaried traders, have exact schemes of risk/reward correlation. But unfortunately, not many traders follow these schemes.

Risk/reward formulas are absolutely objective in relation to the market and created to save trader in the game regardless of result for the utmost long time. Formulas are directly related to saving of capital and guarantee its increase. However, the majority of traders prefer to risk, relying upon

the intuition. Risk is frequently a dominant factor for them.

That is why, traders do not use these formulas, and the majority of them, eventually, loses all capital and cut out the game.

Traders-beginners often ask: "What sum is needed for trading?". It is an ordinary question at the choice of start-up or trade capital. Answer will be as follows: "You may need much more, than you think".
A standard lot of a day trader on the American market is 500 or 1000 stocks. Especially, it concerns those, who prefer short trades ( scalps)

. And at a lot in 100 stocks a scalp becomes senseless, as it can simply not cover the commission.

At the same time, there are a lot of reasons, according to which traders-beginners should trade a lot at 100 stocks. The first reason (in order and meaningfulness) is that 90% traders lose 90% their capital. Therefore they have scanty sums on their accounts at the moment, when finally decide to give up trading and focus efforts on something more suitable for them.

For such people the 100 stocks trade is, possibly, the only acceptable method of trading on the initial stage. Moreover, great losses inevitably turn trader's mind, and he needs not only the capital recovery but also faiths in himself. And trader's self-confidence can be recovered only through successful trading.
Sure, trade through simulator can be useful in this situation.

The second reason is that 100 stocks can be the wonderful addition to other types of trading. In fact, the majority of traders loses money on scalps. And for creation of equilibrium it can be useful for them to use other crucial strategies.

The third reason is the possibility of successive construction of large position during time.

Such approach is especially popular with the supporters of the strategy named "covered call".

A trader should synchronize his activities with the market activity. For this purpose one should use the method of direction and duration determination of existent trend. Trader's strategy should exclude any element of anticipation and control, which means his emotions from the process of decision making and keep only the possibility to act – to place orders for buy/sale. At such strategy a trader should only choose a security with the large enough volatility, say, with an annual channel no less than two prices, and then even the 100 stocks trade becomes a worthy, pleasant and profitable business.