5 Things About Online Trading You May Not Have Known

5 Things About Online Trading You May Not Have Known

1. The US Dollar is the most actively traded currency. The Euro is the most actively traded counter currency, followed by the Japanese Yen, British Pound and Swiss Franc. Market moves are driven by a combination of Speculation, especially in the short term; Economic Strength and Growth; and Interest Rate Differentials.

2. Speculation is akin to Gambling. Speculators purchase something with the hope that they can soon sell it at a higher price, but without necessarily understanding, or even caring about why the price should go up. Avoid Speculation and Speculators. Depend on Analysis instead and never take your eyes off the charts especially if you are scalp trading.

3. When you buy a share of stock on the Stock Market, you are not buying it from the company, you are buying it from some other existing shareholder. Likewise, when you sell your shares, you do not sell them back to the company, rather you sell them to some other investor.

4. When trading with recommended signals, the trade more often than not, starts out in the negative. The spread is the reason your trades start out negative. When you don’t pay attention to the spread you’ll find that your trades seem to be closing before your stop price, or your carefully placed stop order never triggers despite the market hitting that price. The market is not combining against you to make sure you never see profits, you just need to trade using the proper prices. Stay patient until the figures reverse to profits. Sometimes positions are closed for fear of loss. To avoid this fear, always trade with maximum of 1% of your capital. This is the basics of Risk Management.

5. The worst times to trade Forex, Indices, Stocks or Commodities include:
a. Sundays – everyone is sleeping or enjoying their weekend.
b. Fridays – liquidity dies down during the latter part of the Wall Street Session.
c. Holidays – everybody is taking a break.
d. Major news events – you don’t want to get whipsawed or jonced up.
e. During an episode of Game of Thrones, the NBA Finals, Premier League Finals, UEFA Championship Final or the Superbowl.