Winning Edge Trading: Successful and Profitable Short- and Long-Term Trading Systems and Strategies

CHAPTER 2

Introducing the New Trading Paradigm

The investment world is in the midst of a paradigm shift. This change might be stressful and cause many losses for traders who fail to recognize it or for those who do indeed recognize the change but fail to adapt to it. Conversely, traders who wisely utilize the new conceptual framework of the financial system will succeed and enjoy better performance from their trading.

The new paradigm of trading offers you opportunities to achieve higher performance with less risk in a speedy manner. This represents a major departure from what was once, not long ago, commonly accepted practice. Now, short-term and flexible investment management and decision making are the order of the day. They replace protracted, inefficient, long-term buy-and-hold strategies that are no longer practical in today’s investment environment.

New concepts, such as the exchange-traded fund (ETF), for example, are swiftly replacing mutual funds, its old counterpart. This is because traders display more inclination toward risk in exchange for higher performance by embracing hedge funds and other exotic investment strategies.

To be a successful trader and achieve great performance from your trading, you need to change the way you were taught and trained about investing. The old ways of doing things are simply not going to work anymore. You need to learn and understand new concepts, tools, and trading models that are more suitable and productive for the current information ...