Everyone is looking for opportunities to make more money and build multiple income streams to have passive income in this era of economic instability and period of job insecurity due to mass retrenchments.Hence, a lot of work from home schemes for housewives, internet marketing as well as affiliate programs become hot and popular avenues for people to seek passive income.
I believe that one of the potential business that could drive passive income is stock trading. Stock trading has the various characteristic of a flexible home business and could potentially be a lucrative business.
The few characteristic of stock trading :
(a) Flexible Work Time - Well, it is not really flexible literally although you do have much flexibility than most work. If you are a day trader, you still have to trade during the trading hours when the exchanges is open to make your income, but you do have the flexibility of working from home in this internet age where electronic trading is popular.
(b)Low Capital Investment - Most people believe that you need a lot of capital to start a trading business. However, if you delve into the details, you will find that you actually do not need a lot of capitals for trading. Trading is not investment. The primary difference is the time frame. In trading, you want to make the most percentage gain for your capital in the shortest time to limit exposure to market. Investment takes a longer time horizon to achieve the gains and generally, the investor should not be monitoring the equities on a day to day basis. The idea of investment is to let your money make money. For trading, the trader have to make money with money so considerable time and effort is needed to monitor short term trades.
Take an example :
A trader with capital of $10,000 trades to gain monthly 10% on his capital by making multiple short term trades in a month. In 12 months, the trader will have more than double his original capital.( of course, the trader must have some skill levels to maintain consistent profits.)
An investor may look at gaining 10-20% by investing $10,000 in a quality stock for 12 months and reap the returns. The investor don need to actively enter the market for profits.
(c)Low Entry Barrier - The trader need to pick up the skills of trading as well as a small capital for trading. There are many programs in the market that teach trading. The person just need to have the interest and willingness to invest time to learn trading to gain consistent and moderate returns.
Stock trading can further be divided into short, mid and long term. All three time frame require different strategy and skill levels to achieve income as well as wealth.
Stock Trading as a business is definitely not a get rich quick scheme. The person need to build up the proper skills to trade over time to deliver consistent income. But the most important of all is the right mindset to manage emotions during trading as well as the skills of risk management.
I believe that stock trading can definitely be part of a wealth strategy to deliver a stream of passive income.
Visit our website stocktradezone to know more about trading techniques as well as weekly stock call discussion.
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