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9
What "Investor's-Mind" Has to Offer Traders |
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There are some fundamental differences between short-term trading and long-term investing. The difference in time horizon has traditionally made for different styles of thinking and behavior. While we don't need to focus on these differences as they have conventionally been viewed, we will mention some of them in passing as reference to illustrate our points. And we can think of these differences as broadly defining what we may refer to respectively as investor's-mind and trader's-mind. Investor's-mind, then, is the mind-set traditionally associated with long-term investors, while trader's-mind will refer to the typical thinking of short-term traders. |
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What is becoming increasingly clear is how the technology of cybertrading and the heightened volatility of the market have forced us to question some of our long-held assumptions regarding these two mind-sets. Both the rules of the game (the advent of deep discount brokerages and of electronic trading) and the playing field itself (the exchanges, ECNs, after-hours trading) are obviously changing rapidly; this requires that our thinking keep pace. |
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As a result of these changes, some of the thinking of short-term traders may be usefully applied to the longer-term online investor. We will examine how this may be done in Chapter 10. But first, in this chapter, let's flip it around and ask what active traders can gain from investor's-mind. Does investor's-mind have anything to offer the trader? |
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