Know These Trading Secrets
Trading is speculating. It is not investing. It is not the buy and hold strategy that was taught to you. Trading can be challenging. Trading is a risky business and requires active participation. Speculation is done in the hope of profiting from market fluctuations by taking a business risk. It also requires putting your money on the side of the trade on which you think the market is going to go up or down. Successful speculation requires predicting outcomes and analyzing different market situations.
If you are a trader, you should appreciate the fact that if you apply the correct techniques for analyzing trades, manage your money and protect your trading account, you can be wrong 70 percent of the time and still be a successful trader. How is that possible? It is only possible by entering a trade where the risk/reward ratio is les than1/3.
Right now forex and gold markets are really hot while the stock market is down. Stock market was a great investment opportunity a few years back. Over time, opportunity keeps on shifting from one market to another. Gold prices are going up. Those investors who entered this trend in the gold market by investing at the right time if they are going to ride the trend till it lasts in the gold market will make a lot of money. At the moment almost everyone is investing in gold as a hedge against likely USD depreciation. Everyone includes countries like China, Russia, India, hedge funds, institutional investors like big corporation and big banks, and retail investors.
Last year in 2008, oil prices had reached almost $140 per barrel in a matter of few months. Many hedge funds had made a lot of money by investing in crude oil futures in the year 2008. Then the bubble burst and oil prices came tumbling down to almost close to $35 per barrel. This situation may continue for some months or some years but suddenly you will find that crude oil futures have become a great investment opportunity again. Right now oil prices are down due to the reduced demand in the global markets.
Oil prices will again go up in a few years time as the global economy recovers and demand for oil increases. In trading it is the timing that is of essence. Timing for entering the market and the timing for exiting the market!
Successful trading requires mastering a strategy that enables you to trade multiple markets and multiple time frames. A lot of people make the mistake of focusing only on one market. In reality all the markets are interlinked. If something happens in one market, you will find the repercussions in the other markets. Many people end up spending time on only one market.
They do testing, development, put on a million indicators, go and trade live. They do everything they can while spending all kinds of time trying to figure out one market and one timeframe. But then what almost happens is that market starts to go sideways or the opportunity shifts to another market.
You really have to have the ability to be able to adopt the market conditions and not waste your time to really master one market which is critical. There were so many stocks just a few years ago that were incredible to trade that either dont exist anymore or would not trade successfully today.
Many gurus will teach you that you really need to learn the ins and outs of one market. They will tell you to focus only on one market and then stick with it. But the problem with that philosophy is that opportunity keeps on shifting from one market to another. Mastering different markets is counterintuitive. Always remember a good trader always follows where the money goes. In other words, follow where the opportunity goes. - 23212
If you are a trader, you should appreciate the fact that if you apply the correct techniques for analyzing trades, manage your money and protect your trading account, you can be wrong 70 percent of the time and still be a successful trader. How is that possible? It is only possible by entering a trade where the risk/reward ratio is les than1/3.
Right now forex and gold markets are really hot while the stock market is down. Stock market was a great investment opportunity a few years back. Over time, opportunity keeps on shifting from one market to another. Gold prices are going up. Those investors who entered this trend in the gold market by investing at the right time if they are going to ride the trend till it lasts in the gold market will make a lot of money. At the moment almost everyone is investing in gold as a hedge against likely USD depreciation. Everyone includes countries like China, Russia, India, hedge funds, institutional investors like big corporation and big banks, and retail investors.
Last year in 2008, oil prices had reached almost $140 per barrel in a matter of few months. Many hedge funds had made a lot of money by investing in crude oil futures in the year 2008. Then the bubble burst and oil prices came tumbling down to almost close to $35 per barrel. This situation may continue for some months or some years but suddenly you will find that crude oil futures have become a great investment opportunity again. Right now oil prices are down due to the reduced demand in the global markets.
Oil prices will again go up in a few years time as the global economy recovers and demand for oil increases. In trading it is the timing that is of essence. Timing for entering the market and the timing for exiting the market!
Successful trading requires mastering a strategy that enables you to trade multiple markets and multiple time frames. A lot of people make the mistake of focusing only on one market. In reality all the markets are interlinked. If something happens in one market, you will find the repercussions in the other markets. Many people end up spending time on only one market.
They do testing, development, put on a million indicators, go and trade live. They do everything they can while spending all kinds of time trying to figure out one market and one timeframe. But then what almost happens is that market starts to go sideways or the opportunity shifts to another market.
You really have to have the ability to be able to adopt the market conditions and not waste your time to really master one market which is critical. There were so many stocks just a few years ago that were incredible to trade that either dont exist anymore or would not trade successfully today.
Many gurus will teach you that you really need to learn the ins and outs of one market. They will tell you to focus only on one market and then stick with it. But the problem with that philosophy is that opportunity keeps on shifting from one market to another. Mastering different markets is counterintuitive. Always remember a good trader always follows where the money goes. In other words, follow where the opportunity goes. - 23212
About the Author:
Mr. Ahmad Hassam is a Harvard University Graduate. He is interested in day trading stocks and currencies. Know The Trend Forex System. Learn Forex Trading!
posted by X - Men @ 3:47 AM
0 Comments
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home