There are many myths that surround the trading of forex. A lot of it is due to the advertisements on internet and media about how easy it is to trade forex and the quick money traders can make. There are also attempts to pitch it such that it is much less risky than trading in stocks or commodities but at the same time more profitable.
It is important to note that this myth has to be exposed and seen for what it actually is. Currency trading or trading in the currency market is as risky if not more and as the saying goes, there are no free lunches anywhere. You cannot make quick money doing currency trading just as you cannot when trading stocks or commodities. Many traders in their enthusiasm to get into it have had to undergo huge losses and the advertisements appearing on media are just part of a big scam to induce people to trade. Having said the above, you can make money on currency trading if you are able to track global developments on the economic, political and financial fronts and are savvy to quickly take positions or exit them. You cannot just get into currency market without having a good enough understanding of how currencies move, who the big players are trading in this market and the influencing factors that drive this market. Once you get a decent fix on the above, you then can scout for a broker who has been in the business for long and who can offer you advice initially on how to go about it. The trick is not to leverage heavily in the beginning but make small trades to test the waters. Once you are more confident about the market and how it works, you can place bigger trades. Whether it is stocks, commodities or the currency market, when you get into heavy leveraging, you expose yourself to much greater risk if the trade turns against you. Conversely, the rewards can also be big but unless you have deep pockets and afford to lose big, it is better not to do currency trading through heavy leveraging. It is also advisable to begin currency trading only through legal sites and brokers so that you do not end up contravening the law of the land. Do not succumb to advertisements that do not present the true picture.
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It is one thing to occasionally dabble in equity stocks such as buying a stock based on a tip by a friend or stock broker and quite another thing to trade equities on a daily basis. There are some risks associated with this activity that you as a beginner and just getting into it should be aware of in order to safeguard your capital.
Indeed, the share or stock market represents a platform that offers opportunities to everybody to make money. Today, with easy internet access, user friendly trading software and affordable demat as well as trading accounts available, anybody with some money in his bank can get into trading on equity within a week. The volatility that is seen every day in the market is sweet music to the ears of traders. Day traders whose sole occupation is to watch the stock market on their monitors and place trades so as to square of f positions within the day get many opportunities to take buy and sell positions due to such volatility. It may appear that many of them are making easy money by equity trading but the reality can be starkly different. It is not recommended to get into stock market trading if you are one of those hoping to get rich overnight or within a short span of time. There are no quick get rich formulae to help you when you trade equity and commodities or even derivatives. The reason is that there are many factors influencing the movement of stocks within the day as well as overnight positions. The world today is interdependent on economies of different countries. Any development with regard to geopolitical, financial or economic fundamentals can immediately have an impact on the stock market. That is one of the main reasons why day traders prefer not to take overnight positions. Having said the above, it is possible to make money on the stock market trading on equity and other asset classes. You have to possess the ability to constantly learn every day, exercise mental discipline while trading and have the gumption to ride with the losses that are inevitable. Having deep pockets will certainly help tide over losses but that should not make you complacent and motivate you to throw caution to the winds. So read about trading on equity well enough before getting into it full time. Online Trading – An Overview That You Must Know Prior To Opening That Online Trading Account9/25/2016 When it comes to making money in the stock markets, you may have heard many stories of easy money and also where traders have lost big money in a single day. These incidents happen on a daily basis across trading sessions and should not be the basis on which you decide to enter into day trading. You have to know more before you can step in.
What is day trading exactly? Today, it is easy to trade in stock markets if you have the demat account, money in your bank, access to a trading platform and an online trading account. Online trading is often mistaken for day trading and that is not the truth. Online trading is just a broad term for share market trading that is done online and should be seen as such. Day trading is where a trader takes position on a stock and exits it within that day, either making a loss or profit. That is because any trades carried overnight bear the risk of something happening in overseas markets that can either positively impact or negatively influence the opening of the Indian market the next day. Traders do not wish to carry that risk always. Day trading is not for getting rich overnight You have to dismiss the thought day trading can make you rich very soon. Enter day trading or online trading with the belief you should start small, make wins that are not too big initially before taking more aggressive positions. Even if you have the money, it is better that you are not very aggressive and taking over leveraged positions as they have the potential to wipe out gains in an instant. Day trading using your online trading account should be done more conservatively where in you set targets for profit due to small price movements of stocks. Use technical analysis and take guidance from your adviser It would also be useful if you can look at technical analysis charts of stocks you wish to take positions in before you place the trade. Take inputs from your adviser also so that you are making an informed choice and not doing a blind trade on a particular stock. Be prepared to suffer losses at times and you can minimize them by following stop order triggers faithfully when doing your online trading. Before the advent of the internet and in particular high-speed broadband, traders and investors had to depend on stock market brokers to place trade orders of stocks, commodities, and derivative products. The delay in getting through to the broker due to his landline or mobile being busy, occasional misunderstanding of what is being communicated often led to lost opportunities and sometimes erroneous trade orders getting placed.
Online share trading has put the power into your hands Today, the access to high-speed internet and in particular information related to market movements has made the process of stock trading a transparent and easy one. You can do onlinetrading of shares if you have broadband internet, an online share trading account with your broker, a demat account, trading software and money in your account. Online trading India volumes have been registering substantial increases over the years as more and more people are gaining exposure to its ease and convenience. The advantages of being able to study market movements through technical analysis software and quick access to world market developments are enabling traders and investors to take informed decisions on their own and without the need to depend on brokers for specific stock information. When you open the trading account with your broker, you will be given access to the trading software, and there will also be a relationship manager allotted to you. It is beneficial to pay heed to the trading ideas suggested by your relationship manager in the initial phase so that you become acclimatized to the software and also to the process of online trading. Online trading account – Use it with caution Having mentioned the above advantages of online share trading, it is essential also to talk about the possible negative exposure traders can suffer. Lack of mental discipline or inability to stick to stop loss positions and over-leveraging of positions can quickly lead to huge monetary losses. The ease with which you can place orders can also become the Achilles heel as traders become over enthusiastic and optimistic about their trading positions. If used with discretion and if you can take decisions based on technical analysis of specific stocks or indices, online trading can become a profitable means of earning income. You can also use your trading account to invest in other asset classes like mutual funds, government securities, commodities. |
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September 2017
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