This post brought to you by: CMC Markets
To start any business you need a certain amount of start-up capital; how much, will depend on the business and your expectations of future earnings. You can speak to professionals, people who have experience in the field of trading – also reputable brokers such as CMC Markets CMC Markets who come with many years of experience. It is important not to follow a hit-and-miss attitude. Be prepared, find strategies, both on the internet and from traders who have been trading for some time, and remember that volatile markets are a given. Success is never guaranteed, but with the right attitude, studying the markets daily and by following basic principles you have a good chance of being successful.
Different Trading Vehicles
Decide what kind of trader you are: a day trader, swing trader or investor. Also do the research and decide what you want to trade: forex, commodities, futures, stocks or options. Although certain principles apply to all these, there are differences which you need to understand before you get going. Also remember that is very important to study trends over a period of time; there are no overnight indicators to show a pattern.
The stock market operates on the premise of the future value of shares which are traded. If you are able to gauge the value of the stocks you want to trade, you have a good grasp of what the stock market is about. The type of stock you prefer to trade, will determine the way you trade. Some may prefer an approach whereby they act with high frequency and accept that profits will be smaller. These traders are called ‘scalpers’. Another category is referred to as the ‘intraday’ traders – they keep positions anywhere between a few minutes and a few hours, but never overnight; hence (intra-)day. The other category is the ‘swing trader’, the kind of day trader that keeps positions for days, and even weeks before exiting positions. The important thing is to never act on impulse: study the movement in the market and make your own informed decisions.
Trading forex has become a very popular Trading forex has become a very popular money making tool, whether you look at it as a full-time occupation, or a part-time business. Forex trading is easy, because you can do it anywhere, at any time of night or day, since it never ‘closes’, unlike other forms of trading. The object of forex trading is to buy and sell two different currencies at the same time (e.g. you buy USD as you sell EURO), hoping that you will gain profit by buying the currency that will show an increase in value as opposed to the one you got rid of. Just like in the stock market, it is important to know how currencies fluctuate. Make informed decisions before you trade.
Go Out and Make Money!
Once you have done your homework, understand important terminology and the principles of trading, it is up to you to get busy. With the right attitude and knowledge you can position yourself very favourably to make good money as a trader.