t2

Tuesday, January 19, 2016

Saving Money and Learning to Trade

I really know nothing about financial trading, so it's always nice to learn something new. I hope you enjoy this post by Daniel Bailey and find it as educational and enlightening as I did.


One of the most pervasive myths in modern society is that financial trading is only carried out by those with decades of experience and through the use of professional brokers. Although this may have indeed been the case two decades ago, the Internet has now opened up this very same realm to anyone who desires to enjoy greater amounts of liquidity and freedom. There are a number of methods to develop a well-rounded and lucrative portfolio; many of these much easier than one may initially believe. How can anyone with little knowledge of this area begin down the path towards success?

Budgeting


It is a myth to believe that simply leaving one's money within a savings account will eventually bring wealth. In some cases, the interest earned will not even offset the impacts of inflation. Before delving into sectors such as the Forex markets, a certain amount of capital should be set aside. This can be anywhere between 10 and twenty per cent. However, let us highlight that this is known as "risk" capital. To put it another way, losing these funds will not cause one's lifestyle to be crippled.

Liquid Positions

Another distinct advantage of today's global markets is that liquid positions abound. One stellar example here can be seen in the Forex community; trillions of dollars change hands each day. With such flexibility, the potential to accrue short-term profits is very real. Prudent investors will therefore take advantage of such movements through knowledge, advice and real-world experience. Any profits can be reinvested or placed towards long-term goals such as adding to a pension plan or covering the costs of a university for a child. This type of liquidity should always be taken advantage of.

Diversification

Only the most stable of vessels can survive on a turbulent ocean. This is the same principle to embrace regarding modern trading methods. Placing all of one's funds into a single position can result in either massive profits or massive losses; nothing in between.To avoid this common mistake, it is wise to diversify assets into different sectors. Examples here can include currency pairs (Forex trading), CFDs (contracts for difference), medium-term commodity trades and long-term assets such as precious metals or even real estate. Should any one of the assets fail to perform, there will not bea knock-on effect to bring down an otherwise healthy portfolio.

Electronic Trading Platforms

Any successful trader will highlight the immutable fact that the type of electronic platform employed is at least as important as the strategies which are undertaken. So, choosing the correct system is critical. Platforms need to be easily interpreted by the user while simultaneously presenting all of the most relevant trading information in a real-time scenario. Firms such as CMC Markets straddle both of these necessities. A successful trade is defined as a well-informed trade. Modern systems enable anyone to execute lucrative positions from the comfort of their own home or even from remote locations through the use of dedicated mobile applications.

The Learning Curve

It is always best to avoid impatience when trading. There are many who hope to enjoy permanent liquidity in only a matter of weeks or months. Such an enviable position takesyears to achieve and even the best traders will admit that there is always something elseto learn. So, never forget that patience breeds eventual success. There is simply no reason not to take advantage of the wealth of information that is now available through reputable trading platforms and countless news outlets. Saving money for the future is now more of a reality than ever before.

See my disclaimer.

No comments:

Share This