All traders are wondering: how not to destroy your account? Is it possible to replay the market in the long run? It turns out you can! This article will talk about how to do this.
Each trader who comes to the exchange is obliged to develop a trading algorithm with which he can replay the market. In many books you can read that technical analysis is the same for trading on the Forex, the stock market, and the commodity market. It is not true. All of the above markets live by their own laws, although there is a certain similarity between them.
The foreign exchange market is considered the most dangerous, although it can be quickly earned. But will this result be stable? Before trading for real money, it is advisable for you to trade longer on a demo account.
In the currency market, trading in popular currency pairs is riskier than trading in cross-rates or exotic currencies. However, on any currency pair, you can both earn and lose money. In any case, you need to trade a very small lot, then your chances of success will be slightly higher.
Cryptocurrencies aroused considerable interest in the trading community, but with an experimental analysis of the chart of bitcoin and other cryptocurrencies, it is easy to notice that this tool is not easy. If the bitcoin rate fell almost 2 times in a few days, then this is a signal so as not to mess with it. Although, the truth is that a lot of speculators have earned on it.
Stock market trading
This market is considered the safest, although it is easy to part with your money on it. Now is the year 2018, and 10 years have passed since the previous crisis. And crises happen approximately every 5-10 years. You can also earn money in a falling stock market (CFD), but it is much more difficult to do this than in a growing market. The bearish stock market is three times heavier than the growing market due to the so-called “Tick up.” Shares do not just fall in price but make jumps up, and this prevents the trader from building a “pyramid”. In a bear market, many speculators refuse to build a “pyramid” and trade according to the 1: 2 or 1: 3 method, that is, they lose 10 dollars and earn 20 or 30 dollars in a deal. But even this approach does not bring success to everyone.
What stocks should I choose to buy? Those that have not risen too much in price. Although, sometimes expensive stocks have considerable growth potential. No need to buy stocks with a junk rating. For example, stocks at 1, 2 or 3 dollars. Often, such securities have been in this price range for years and are not going to grow in value. Starting from $ 15-20, stocks become interesting to most traders.
The commodity market is located between the foreign exchange and stock markets in terms of complexity. Trading silver, gold, oil, soybeans, corn, wheat, and other goods can also succeed. It must be remembered that liquidity in the commodity market is lower than in the forex market, for example. Hence, price gaps can be quite large. With a pyramid attack on the market, price gaps – gaps – can cause significant financial damage.
In the product market, the seasonal factor must also be taken into account. For example, when collecting crops in the Northern and Southern hemispheres of the Earth, the price can actively change. Keep in mind that summers in Australia, Argentina, New Zealand and other countries of the Southern Hemisphere last from December to February. And the above countries are active exporters of grain crops.
Desire to trade
Do you have it? Practice shows that not everyone has a desire to trade. Many speculators do not want to trade, although it seems to them that they want to trade. You asked yourself the question: why do you need money? If you do not know the answer to this question, then money will not come to you. They find only those who really want them. Gamblers who do not want to trade, but want to play, also come to the exchange. On the stock exchange, these people have no chance of success. Temporary good luck is certainly possible, but the ending will be sad.
Where to spend your money?
Earned money on the stock exchange you should spend, first of all, on yourself and on people close to you. For example, you can go on holiday with your family to India or the Dominican Republic. It is important that the success of the exchange brings you joy. If you work in order to pay utility bills, then such a trade will not be in your joy. And there will be nothing surprising in the fact that your subconscious will block the road to success.
Find an advantage
Do you know how to replay the market? To do this, you must have an advantage over him. What does it consist of? Without an answer to this question, you can’t even approach the charts. Correct trend identification is an advantage. Also, an advantage is pyramiding – the method of consecutive purchases.
If you are going to win in the market, then you need to adhere to discipline. You can’t do what you want on the stock exchange. Here it is necessary to do what is necessary. If you received a buy signal, then you need to buy it. If for sale – to sell. If the trading system signals that you should not enter the market, then it is reasonable to remain “square”. There are no disciplined traders.
How to trade on the exchange?
Each speculator seeks the answer to this question himself. In the West, they actively trade in the stock market. In the Arab countries actively trade in the commodity market. Forex is popular in the post-Soviet space. It is advisable to work on a demo account for a long time and trade in all markets. Sometimes it takes years to figure out which market suits you best.
Fundamental or graphical analysis?
Typically, traders use both types of analysis. And yet, if you choose one, then most professional speculators prefer graphic analysis. Fundamental (news) analysis has a significant drawback – the market wins the news in an instant. You can predict the news, and even easier to “decipher” the news background. But this is already art. For example, bad news from EU countries can cause serious damage to the common European currency. True, no one knows what will happen in the next moment. Bad news gives way to good news and vice versa.
Entry point and exit point
The deal must be entered not earlier and not later but on time. In the same way, you need to get out of it in time. As a rule, it’s almost impossible to enter and exit at the best moment, but you need to strive for this. How to learn how to enter the market? For this, most traders use indicators and oscillators. There are traders who do not use them. This does not mean that they do not succeed. What is more important: to enter the market or exit it correctly? Both are important. And still: the correct exit from the market is more important!
This is the main science on the exchange. Not mathematicians – the best traders, namely psychologists. Philosophers are also good at trading. How do you behave in a difficult situation? Don’t you know yet? Over time, you will learn to understand yourself. This is more important than knowing the psychology of the market. The market is knowable, but it remains completely unknown. And you can know yourself, although this is not easy.