Know These Trading Secrets
Trading can be challenging. Trading is not investing. It is speculating. Speculating is defined as assuming business risk in the hope of making a profit from market fluctuations. Successful speculating requires analyzing different market situations, predicting outcomes, and putting your money on the side of the trade on which you think the market is going to go up or down.
Trading can also be the appreciation of the fact that if you apply the correct techniques for analyzing trades, managing your money and protecting your account, you can be wrong 70 percent of the time and still be a successful trader.
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.
Timing for entering the market and the timing for exiting the market is very important for a successful trade. In trading it is the timing that is of essence. As the global economy recovers and demand for oil increases, oil prices will again go up in a few years time.
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.
Many traders get stuck up with one market. They want to master that market. They trade only one instrument. They do testing and development. They put on a million indicators. Then they go and trade live that instrument. While 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 the market starts to go sideways. The opportunity shifts to another market.
You really should have the ability to be able to adapt to different market conditions and not waste your time mastering one market. This is critical if you want to make a fortune in trading. You can start with one market but over the years add a few other markets as well. This will diversify your risk as well. For example, 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. Stocks are no more a good investment. But if you want to trade stocks, you will have to wait for a few more years for the stock market to boom again.
Mastering different markets is counterintuitive. 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. A good trader always follows where the money goes. - 23310
Trading can also be the appreciation of the fact that if you apply the correct techniques for analyzing trades, managing your money and protecting your account, you can be wrong 70 percent of the time and still be a successful trader.
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.
Timing for entering the market and the timing for exiting the market is very important for a successful trade. In trading it is the timing that is of essence. As the global economy recovers and demand for oil increases, oil prices will again go up in a few years time.
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.
Many traders get stuck up with one market. They want to master that market. They trade only one instrument. They do testing and development. They put on a million indicators. Then they go and trade live that instrument. While 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 the market starts to go sideways. The opportunity shifts to another market.
You really should have the ability to be able to adapt to different market conditions and not waste your time mastering one market. This is critical if you want to make a fortune in trading. You can start with one market but over the years add a few other markets as well. This will diversify your risk as well. For example, 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. Stocks are no more a good investment. But if you want to trade stocks, you will have to wait for a few more years for the stock market to boom again.
Mastering different markets is counterintuitive. 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. A good trader always follows where the money goes. - 23310
About the Author:
Mr. Ahmad Hassam has done Masters from Harvard University. He is interested in day trading stocks and currencies. Know The Trend Forex System. Learn Forex Trading!
posted by Mr. Forex at
3:12 AM
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