So when the going gets tough, you’ll need an answer for the above question - and you’ll need to meditate on it when you’re wondering whether to keep going.
The truth of the matter is that for traders who take their efforts seriously, it’s always going to be a process with high rewards and potentially high risks, too. Below, we’ll look into some ways that trading offers you a different experience from a 9 to 5 - and why that can be a very attractive prospect for anyone looking to make a better future for themselves.
You can work for yourself
Being your own boss isn’t essential when you’re getting into trading - there are plenty of trading firms who offer the chance to benefit from institutional knowledge and greater capital. With that being said, flying solo is the preferred end state for any trader who wants an element of control over what decisions they make, what trends they follow and which instincts they listen to. When you get into trading, a major part of the attraction has to be the opportunity for financial independence - and you’ll feel that independence earlier on if you’re working for yourself.
If you’re a solo trader and you quite simply don’t want to turn up one day, then you have that option. As long as you’ve got the appropriate instructions in place, or have no open trades at a given time, you can take some well-earned rest and enjoy the independence you have signed up for.
You can trade from anywhere (within reason)
Independence is all well and good, as long as you are actually putting it to use. Trading from home is a more attractive prospect than riding a packed train to sit in an office, and that sense of freedom can be expanded as far as you want to expand it. You don’t need to stick to the Dow Jones if you’re a trader in the US, or trade specifically on the FTSE if you’re in London. As the bulk of trading happens electronically, all you need is to be set up for remote trading, and you can do it from anywhere in the world.
It takes the correct software, of course: you’ll need the right trading platform and a suitable payment gateway for when you want to cash out. As long as you have established these necessities, you can spend part or all of a year in a beachside paradise while you trade the markets of one of the world’s financial hubs like London, New York or Tokyo.
Trading itself is a varied field
The world of stock trading can look absolutely impenetrable for anyone who isn’t used to it, and there is no doubt that it can be intimidating to the point where some people simply turn away from the idea. But if your belief is that trading is too pressurized, confusing and hostile to newcomers, then you may need to simply find your niche. Once you’re comfortable in one area you’ll find that a lot of concepts are transferable between types of trading.
It’s not such a long time ago that Forex trading became a household topic because of its popularity among people who would never have ordinarily even considered playing the markets. If you’re minded to follow international news anyway as a personal interest, then you can get a feel for how different stories such as election results can move the line, and can apply your knowledge to increase the chance of success. If, on the other hand, you’re trading the stock markets, you’ll get a feel for which ones have greater volatility at which times, and know how to react to that.
Trading is a varied life that offers little in the way of guarantees, but so much in the form of opportunities. Working at it will open up new worlds to you, and there aren’t many jobs out there that regularly offer the same level of variety - in the form of working days, challenges, and rewards. As long as you’re not expecting every day to be the same, it’s pretty obvious why so many people come to see trading as their passport to the financially secure future they want.
This is a contributed post.
Asia Pacific stocks were mostly down Wednesday morning ahead of the U.S. Federal Reserve’s policy decision due later in the day. The Shanghai composite is down 0.03% at 3,445.63. Overall, the Singapore MSCI down 0.09% at 350.40. Over in Hong Kong, the Hang Seng Index up 0.15% to 28,995. In Japan, the Nikkei 225 up 0.07% at 29,740, while the Topix index is up 0.31% at 1966.0. South Korea’s Kospi down 0.54% to 3050.65. Australia S&P/ASX 200 down 0.47% at 6795.2.
European equities Tuesday closing. The DAX futures contract in Germany traded 0.66% up at 14557.58, CAC 40 futures up 0.32% at 6055.4 and the UK 100 futures contract in the U.K. up 0.80% at 6,803.6.
In U.S. on Wall Street, the Dow Jones Industrial Average closed 0.39% up at 32826.0, the S&P 500 down 0.16% to 3962.7 and the Nasdaq 100 down 0.11% at 13154.9, NYSE closes at 15669.29 down 0.67%.
In the Forex market, GBPUSD up 0.06% at 1.39. The USDJPY up 0.09% at 109.086. The USDCHF up 0.09% at 0.92543. EURUSD up 0.05% at 1.19076, EUR/GBP up 0.01% at 0.85654. The USD/CNY down 0.08% at 6.4998, at the time of writing.
In the commodity market U.S Gold futures up 0.31% at $1,736.46. Elsewhere, Silver futures up 0.01% to $25.919 per ounce, Platinum down 0.33% at $1209.33 per ounce, and Palladium down 0.38% to $2,489.50.
Crude Oil mix on Wednesday; Brent crude oil up 0.42% to $68.76 barrel while U.S. West Texas Intermediate (CLc1) is down 0.44% at $64.89.
In the Cryptocurrency Markets, BTCUSD at 56182.31 down 1.28%, Ethereum at 1783.29 down 1.24%, Litecoin at 199.45 down 1.15%, at the time of writing.
TOP STOCKS TO WATCH OUT TODAY:
DISCOVERY Inc. up 2.905% at $75.81, MICRON TECHNOLOGY up 2.904% at $91.43, FORD MOTOR Co. down 5.379% to $12.49, CARNIVAL Corp. up 5.17% to $28.25, MODERNA Inc. up 8.604% to $156.02, FACEBOOK up 2.02% at $279.28.
US: U.S. companies are opting to issue bonds with fixed coupons rather than floating rates as the spectre of a rapid rise in yields impels them to lock in their costs of borrowing.
Refinitiv data showed U.S. companies have issued $456 billion through fixed-coupon bonds until March 15, a 12% increase over the same period last year.
At the same time, they have borrowed just $77 billion through floating-rate bonds in that period, a 33% decline.
Eurozone: The European Central Bank won’t allow interest rates to rise too soon while the economy still grapples with the coronavirus pandemic, according to its chief economist.
“Our objective is basically to make sure the yield curves, which play an important role in determining overall financing conditions, do not move ahead of the economy,” Philip Lane said in an interview with the Financial Times.
“It is really a shift in monetary policy away from focusing on just the short-term rate by looking at all financing conditions,” because long-dated yields are key too.
Policy makers decided last week to “significantly” increase the pace of buying in coming months amid concerns that higher yields will pull the rug out from under the euro-area economic recovery.
Important Data: EURO ZONE CPI (YoY) (Feb) today at 6:00 this time estimated 0.9%, previously which was 0.9%. US Building Permits (Feb) today at 8:30 this time estimated 1.75M, previously which was 1.886M. CANADA Core CPI (MoM) (Feb) today at 8:30 previously which was 0.5%. US Crude Oil Inventories today at 10:30 this time estimated 2.964M, previously which was 13.798M.
TRADE SUGGESTION- SELL AT 1.3854, TAKE PROFIT AT 1.3824 AND STOP LOSS AT 1.3898
TRADE SUGGESTION- SELL AT 1.19266, TAKE PROFIT AT 1.19054 AND STOP LOSS AT 1.19636
TRADE SUGGESTION- SELL AT 0.86080, TAKE PROFIT AT 0.85946 AND STOP LOSS AT 0.86203
TRADE SUGGESTION- BUY AT 130.145, TAKE PROFIT AT 130.440 AND STOP LOSS AT 129.966
TRADE SUGGESTION- BUY AT 3969.66 TAKE PROFIT AT 4000 AND STOP LOSS AT 3932.35
WTI CRUDE OIL
TRADE SUGGESTION- BUY AT 64.61 TAKE PROFIT AT 65.30 AND STOP LOSS AT 64.31
TRADE SUGGESTION- SELL AT 1727.55, TAKE PROFIT AT 1715.82 AND STOP AT 1739.42
TRADE SUGGESTION- BUY AT 55090.00 TAKE PROFIT AT 55993.00 AND STOP AT 54466.53
WHAT IS A FOREX?
Forex is the marketplace where various world currencies are traded. The forex market is the largest and is the easiest to liquidate within the world, with trillions of dollars changing hands a day. there’s no centralized location, rather the Forex market is a network of banks, brokers, institutions, and individual traders Many entities, from financial institutions to individual investors, have currency needs, and should also speculate on the direction of a specific pair of currencies movement. They post their orders to shop for and sell currencies on the network in order that they can interact with other currency orders from other parties. The forex market is open 24 hours each day, five days every week, apart from holidays. Currencies should trade on a vacation if a minimum of the country/global market is open for business.
3 SIMPLE STEPS TO MAKE YOUR FIRST TRADE IN FOREX
Select a currency pair
When trading forex you are exchanging the value of one currency for another. In other words, you will always buy one currency while selling another at the same time. Because of this, you will always trade currencies in a pair.
Most new traders will start out by trading the most commonly offered pairs of major currencies, but you can trade any currency pair that we have available as long as you have enough money in your account. For this walkthrough, we’ll look at EUR/USD (Euro/ U.S. Dollar). Analyze the market
Research and analysis should be the foundation of your trading endeavors. Without these, you’re operating on emotion. This doesn’t typically end well.
When you first start researching, you’ll find a whole wealth of forex resources – which may seem overwhelming at first. But as you research a particular currency pair, you’ll find valuable resources that stand out from the rest. You should regularly look at current and historical charts, monitor the news for economic announcements, check indicators and perform other technical and fundamental analyses. We’ll talk more about specific types of research later on. Pick your position
If you’ve traded stocks, bonds, or other financial products, you know that you can usually only speculate on the one direction of the market: up.
Forex trading is a little different. Because you are buying one currency, while selling another at the same time you can speculate on up and down movements in the market.
WITH A BUY POSITION you believe that the value of the base currency will rise compared to the quote currency. If you’re buying EUR/USD, you believe the price of the euro will strengthen against the dollar. In other words, you believe the euro is bullish (and the US dollar is bearish).
WITH A SELL POSITION, you believe that the value of the base currency will fall compared to the quote currency. If you’re selling EUR/USD, you believe the price of the euro will weaken against the dollar. In other words, you believe the euro is bearish (and the US dollar is bullish). ADVANTAGES OF FOREX TRADING
A. Ability to go long or go short
While you’ll go short on other markets by using derivative products, like CFDs, short sale is an inherent part of trading forex. This is because you’re always selling one currency (the quote currency) to shop for another (the base currency). The price of a forex pair is what proportion one unit of the bottom currency is worth within the quote currency.
● For Instance:– within the forex pair GBP/EUR, GBP is that the base currency and EUR is the quote currency. If GBP/EUR is trading at 1.12156, then one pound is worth 1.12156 euros. If you think that the pound goes to extend against the euro, you’d buy the pair (going long). If you think that the pound will decrease in value against the euro, you’d sell the pair (going short). Your profit or loss will depend upon the extent to which you get your prediction right, meaning it’s possible to profit whichever way the market moves.
B. Forex market hours
The foreign exchange market is open 24 hours a day, five days a week – forex can be traded from 9pm Sunday to 10pm Friday (GMT). These long hours are because forex transactions are completed between parties directly, over the counter (OTC), instead of through a central exchange. And because forex may be a truly global market, you’ll always cash in of various active session’s forex trading hours.
It is important to recollect that the forex market’s opening hours will vary in March, April, October and November, as countries shift to sunlight savings on different days.
C. High liquidity in forex
The FX market is the most liquid market within the world, meaning there is an outsized number of buyers and sellers looking to form a trade at any given time. Each day, over $5 trillion dollars of currency is converted by individuals, companies, and banks – and therefore the overwhelming majority of this activity is meant to get a profit.
The high liquidity in forex means transactions are often completed quickly and simply, therefore the transaction costs – or spreads – are often very low. This creates opportunities for traders to speculate on price movements of just a few pips.
D. Forex volatility
The high volume of currency trades each day translates to billions of dollars every minute, which makes the price movements of some currencies extremely volatile. You can potentially reap large profits by speculating on price movements in either direction. However, volatility may be a double-edged sword – the market can quickly turn against you, so it’s important to limit your exposure with risk-management tools.
E. Leverage can make your money go further
CFDs are leveraged, which can make your money go further. Leverage in forex enables you to open an edge on the currency market by paying just a little proportion of the complete value of the position upfront.
The profit or loss you create will reflect the complete value of the position at the purpose it’s closed, so trading on margin offers a chance to form large profits from a relatively small investment. However, it also can amplify any losses, meaning losses could exceed your initial deposit. For this reason, it’s important to think about the entire value of the leveraged forex position before trading CFDs.
F. Trade a good range of currency pairs
Forex trading gives you the chance to trade a good sort of currency pairs, speculating on global events and therefore the relative strength of major and minor economies.
With IG, for instance , you’ll choose between over 90 currency pairs, including:
Major currency pairs, eg GBP/USD, EUR/USD, and USD/JPY
Minor pairs, eg USD/ZAR, SGB/JPY, CAD/CHF
Emerging currency pairs, eg USD/CNH, EUR/RUB and AUD/CNH
Exotic pairs, eg EUR/CZK, TRY/JPY, USD/MXN
G.Hedge with forex
Hedging may be a technique that will be wont to reduce the danger of unwanted moves within the forex market, by opening multiple strategic positions. Although volatility is a component of what makes forex so exciting, hedging is often an honest way of mitigating loss or limiting it to a known amount.
There is a spread of strategies you’ll use to hedge forex, but one among the foremost common is hedging with multiple currency pairs. By choosing forex pairs that are positively correlated, like GBP/USD and EUR/USD, but taking positions in opposite directions, you’ll limit your downside risk.
●For instance, a loss on a brief EUR/USD position might be mitigated by an extended position on GBP/USD.
Alternatively, you’ll use forex to hedge against loss in other markets, like commodities.
●For instance, because the USD/CAD generally has an inverse relationship with petroleum, it’s commonly used as a hedge against falling oil prices.
Cut Your Losses
All traders experience losses from time to time, so try not to panic if you make a bad trade. However, think carefully before trying to make back what you’ve lost. It’s easy to fall into the trap of trying to breakeven when you’ve made a loss but, more often than not, this mindset results in your compounding your losses. Instead, accept the odd loss and part and parcel of trading and focus on your long-term profitability, rather than an isolated loss.
Backtest Potential Strategies
Traders use a variety of different strategies when playing the markets but finding the right ones for your needs isn’t always as straightforward as you might think. Before you use a new plan on active markets, be sure to test them against historical data. Using backtesting software is an easy and accurate way to do this. Once you know how the strategy would have worked, you’ll be able to determine its efficacy and decide whether or not to use it going forward.
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Diversify Your Portfolio
Diversification can be an effective way to protect your capital. When you invest in stocks and shares or commodities that react differently to market events, you can offset potential losses and, to an extent, secure your capital. Similarly, investing in different companies or making various types of investments prevents you from ‘putting all of your eggs in one basket’ and can reduce the risk of major losses.
Now that you can make trades yourself, without having to use a broker, trading can be much more cost-effective. However, even relatively low brokerage fees can eat away at your profits over time. By shopping around for reputable brokers or platforms, you can ensure that you’re not paying over the odds to make trades. After all, you’ll want to keep every cent of what you earn as a trader.
Show Commercial Awareness
You may not need to react to every piece of news, but it’s vital to be aware of what’s going on in the world if you want to be a successful trader. An environmental disaster, political unrest, or even new legislation can have a major impact on the markets, which means you need to be ready to react when necessary.
Planning Your Investments
As new opportunities come about and existing investments mature, you’ll want to be proactive about managing your trades. By thinking strategically about the level of risk you’re willing to take, you can identify the trading vehicles that are most likely to generate a return over the short, medium, and long-term, and, in doing so, you can maximize your returns in 2021.
This is a contributed post.
I searched for a similar thread but couldn't find anything close to my question.
I want to ask a rather personal question and therefore hesitated to do so. If this is not adequate just let me now.
How much of your entire capital do you invest in different strategies? And with different strategies I mean preserving your capital, steadily increasing it or increasing it dramatically, like Anchor-Strategy, Steady Condors, and Steady Options. I would also count investing in businesses and real estate as a valid approach. Personally, I would not only say it is a valid approach to invest in multiple assets but almost a necessity. But what about you?
For example, do you allocate 10% for Steady Options and 25% for Steady Condors and 50% for Anchor Strategy? Do you own real estate? Do you plan on doing so?
I know, I already can hear "you have to answer this question for yourself" and "depends on your risk tolerance". But I want to know your opinion and experience on how you would approach investing, now that you know what it takes. What would YOU do if you started from 0 again?
I'm not interested in answers like I could imagine doing this and that. I would expect something along the lines. First I would start saving x amount of money while I learn the Y-Strategy with paper trading. After z time I would then use x amount of money in A-Strategy until I reach point S (some amount of money). At this point, I would still do Y-Strategy but also get my hands on Strategy Z, which promises higher returns. And so on.
I'm aware that this is a question not particularly related to SO but I value your opinions and at least to me a plan for investing is the absolute most important aspect. It's like having an exit strategy for your trades before you open them, just the other way around.
Why do I want to know your experiences? Because I seek a rough guidance on approaching investing. I would like to compare each other approaches.
I think this topic is a significant aspect of investing and therefore for trading. It's equally important for beginners as it is for experienced investors and traders.
10 Reasons Why Trading is Difficult
It is hard not to trade too big when you really believe in a trade entry. It is even harder to take a big loss if it goes against you. It is hard to keep taking your entry signals during a losing streak. It is also hard to miss a signal and watch it go on to be a big winner. It is hard not to add to a losing trade when the price keeps looking better as it falls lower and lower. It is hard to be on the wrong side of a trend. It is hard to buy a breakout in trend because it looks too high. It is hard to miss out on the beginning of a big uptrend. It is hard to cut a loss early with the ego wanting to be right about the trade. It is hard to let a winning trade run when you would prefer a quick gain than a bigger long-term gain. It is hard to buy when everyone is fearful and hard to sell short when everyone is greedy. It is hard to trade through different types of markets, bull markets, bear markets, volatile, trending, and range bound because the rules keep changing. It is hard to convince your friends and family that there is a process to your trading and that you are not a degenerate gambler. It is hard to ever quit trading after you have tasted how sweet a big winning streak is and how life changing it can be. 10 Ways Traders Lose Money In This Market
Making money in trading is a function of the market matching our methodology and approach to the market. But at the same time, traders need to be focused and consistent, as there are several ways traders lose money.
We trade with a philosophy and we profit when it syncs up with the current market environment. We make money when our winning percentage is strong and our losses are minimal, or when or wins are big and are losses are small.
If we have the discipline to follow a system consistently and manage our risk by it, then the profits will come when the market aligns with our method. Until then it is our job to keep our losses and drawdowns under control.
In short, there will be periods where everything is working great. And periods where trades are getting stopped out and lost quickly. It is our job during the latter periods to make sure that the losses are minimal (and that we understand the ways traders lose money). This is a tough task, considering all the different types of traders and approaches. Let’s review some examples.
Day traders have trouble making money in markets that lack intra-day volatility. Trend followers can’t make money when markets don’t trend in one direction for any length of time. Momentum traders lose money when stocks fail to breakout over resistance and trend. Traders that use chart patterns don’t make money when trend line breaks don’t lead to sustained trends. Swing traders don’t make money when support levels fail and stop losses are hit before a reversal. Dip buyers don’t make money when downtrends begin and lows get lower. Option trades lose money when markets fail to trend before the option expires. Option sellers lose money when parabolic moves put the sold options in the money. Investors lose money in bear markets. Perma-bears lose money in bull markets. There are several ways traders lose money in the market. Successful traders ensure that those losses are small.
Thanks for reading.
Read this and more from Steve on his blog NewTraderU.
Probability Vs. Certainty Trap
Why Retail Investors Lose Money In The Stock Market
Are You Ready For The Learning Curve?
Can you double your account every six months?
Are You Following "Tharp Think" Rules?
Adaptability And Discipline
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