Do you want to make money trading? You will have many options to choose from, including currencies, cryptocurrencies, stocks, ETFs, and more. While there are many more ways to trade, let’s focus on these for now.
Currencies & Cryptocurrencies
If you’re going to trade currencies, then you’re going to be operating in the forex market, which is the largest and most liquid market in the world. Traders love liquidity because they can move in and out of positions with alacrity.
Some traders will use moving averages to move in and out of positions, others will use relative volume to predict home run trades. Whether it’s moving averages, relative volume, or another high-potential strategy, you’re going to find the most action in the forex market. This market is also open 24/7, which means you can make money at any time–if you play it right.
As far as cryptocurrencies go, this is the land of high risk/high reward. If you like to take chances, this is where you should be. You can take a long position on something like Bitcoin. If it continues to gain momentum in the coming years, you might make yourself rich.
The other possibility is that it’s shut down by the U.S. government if it’s ever seen as a threat to the U.S. Dollar. However, there is no reward without risk. You’re not going to get rich investing in Walmart because its potential has already been recognized. If you had invested in Walmart when it had three stores and it was a risk, you would be rich today.
If you want to trade stocks, you’re going to need a specific game plan because there are so many different approaches. For instance, you can be a long-term investor, a day trader, or a swing trader. If you happen to be a long-term investor and you’re basing your decisions on fundamental analysis, then it’s absolutely essential that you stick to an industry you know well.
For instance, if you work in the energy industry, stick to energy stocks. Whether you realize it or not, you’re going to have a significant advantage. If you don’t work in any tradable industries yet you have a passion for consumer goods, trade consumer goods stocks. You will enjoy what you’re doing more. And when you enjoy what you’re doing, you have a much greater shot at success.
Whatever course you choose to take, if you want to stay in the game, then you’re going to need to practice money management. Always remember that minimizing losses is what keeps you in the game. It’s imperative that you use stop-loss orders.
ETF stands for exchange-traded fund. There are two different ETF worlds, and you must be aware of the difference. You can invest or trade exchange traded funds that track things like large-cap stocks, growth stocks, or value stocks. These are liquid positions and you know it’s unlikely they will ever fail. Therefore, if you have enough capital, you’re going to eventually make money. Just buy on the dips.
The other kind of exchange-traded funds are the leveraged ones. Stay far away. They are designed to attract greedy traders, and they do it well. If you venture down this road, you will likely go broke.