Many people have this wrong perception... that short term trading strategy is risky and long term trading strategy is safe.

Now, let me put this in an analogy. The capital markets is like a huge ocean and your trading strategy is like a boat on this ocean. Some think that the slow and steady ship is safer than the fast and furious speed boat, right? Now, if the speed boat runs a 20% chance of capsizing but takes only 1 day to reach your destination, wouldn't it be safer than to stay on the ship that takes 1 year to reach your destination, 90% safe from capsize but runs the unpredictable nature of the sea and its weather?

The stock markets is as unpredictable as the weather today. Long term trading strategy for a 10% to 20% gain a year might really be something thought of in the industrial era where people love steady, long term growth. The world today can potentially be thrown into complete chaos at an instance. Who says 911 cannot happen again? A long term trading portfolio can be wiped out overnight suddenly and all you wanted was to make 20% a year out of it. No long term trading strategy today is completely hedged to downside. A long term trading strategy would really glue you to the news.

Short term trading strategy runs extremely low market exposure for as high as a 75% winning rate for profits per win of as high as 100% these days! The amazing results of short term trading strategy have been made possible by the creation of more and more sophisticated financial instruments like options and futures. It may be riskier per trade than long term trading but who needs a 100% chance at a 2% profit per month when we can get a 75% chance at a 100% profit in a just few days?

So how do we manage the 25% chance of losing in short term trading? That's where a smart portfolio management strategy comes in. It has been said that even if you know nothing about picking stocks, a smart portfolio management strategy will be able to help you win money on an overall basis picking stocks at random.

So, what form of trading has the lowest mathematical risk? In my opinion, it is a Short Term trading strategy backed by a sound portfolio management policy. Such a short term trading strategy gives you predictable, high returns in short periods of time at minimum market exposure.

Jason Ng is the Founder of Masters 'O' Equity international. He is a fund manager specialising in options trading and his Star Trading System has helped thousands. Please visit http://www.MastersoEquity.com.