Trading is not difficult to learn and many consider this to be ultimate home business.

Trading is a business that allows you to take control of your financial well being. However, if you are going to be a trader of stocks or commodities following elements are essential to your success.

Mastering these elements will not ensure your success, because there are other factors that influence markets that cannot be covered in this article, but if you don’t master these elements you will ensure failure.

1) Money Management

Money management is taking necessary steps to protect your capital, at all times.

It means knowing when to get out of a trade that is not going your way.

It means only trading an amount you can afford.

It means you do not fall in love with a trade so you are stuck with it no matter it does.

It also means knowing when to leave a market with a profit.

Investing

Investing is holding an asset for a longer term, expecting it to increase in value. The most common example is investing in equity mutual funds through a retirement plan. Many of these funds are held for years and are expected to show a substantial appreciation over long term.

You can also invest in individual stocks and hold them for 6 to 18 months or longer, sometimes much longer. This is referred to as "buy and hold" strategy.