Have you ever thought about what makes the world go round? If you’re a student or a scholar interested in increasing your finances then the world of trading might be useful for you. Find out who is pulling the strings together in the world of trading.
Contrary to popular belief, trading these days is not what it used to be. You probably remember the dramatic scenes you’ve watched in movies where you see a group of people in the stock market, shouting, constantly talking on the phone, a lot of noise, stress, etc. But the truth is that, thanks to technology, everything is now made and monitored by computers using a trading platform. No matter the time of the day or night or where you are in the world, if you have a computer or a tablet with Internet access, you can trade and make money! And the good thing is that it doesn’t matter if you’re just starting or growing. It works for Internet marketers, Real Estate professionals, students with an interest in increasing their finances, local businesses, and much, much more.
So, what does a trader do?
One thing to keep in mind when trading is that you have to work smart in order to succeed. You do not have to learn everything there is to know about trading. In fact, an accumulation of information may distract you from achieving your goals in trading and in general. So, be sure to only learn the information you require in order to attain success. Here are some of the day-to-day realities of being a trader:
- Traders often make use of the technical analysis method. They constantly learn how to use charts to understand current market trends, flow and important price areas.
- They may buy or sell short-term trades, which can sometimes last seconds. On the other hand, they may buy longer term trades with a holding period of weeks, months, or even years.
- A stock trader watches the market and manages monetary investments in different markets and assets.
- They design for themselves a daily/weekly/monthly risk management and trading plan in order to make the most out of their trading with minimum risks and mistakes.
- They engage with technical, fundamental and/or environmental research, depending on what asset they interested in.
- Although trading is usually done independently, the atmosphere in general is fast-paced, exciting and comes with a lot of pressure.
The Psychology behind being a Trader
As human beings, we are naturally emotional, and most of the time these emotions lead us towards a path of trading losses, unless we learn to control them. So, here are six facts on the psychology behind partaking in the world of trading:
- It’s all about the mind-set.
- You can begin trading without any money at all! Brokers will generally provide you with a demo account option in which you can trade without using any real money. You should manage the account in the same way you would if real money was on the line.
- Similarly to a new student, or new employee, the key for the trading beginner is not making lots of money. You have to educate yourself, learn theoretical information and gain practical experience. Only then should you risk large amounts of money in trading.
- The Forex markets are not a way to make quick, easy money. They are never predictable, as much as people would have you believe differently.
- If you find yourself thinking that you have it all figured out and that you have nothing more to learn, you are probably suffering from an overconfidence bias. To overcome this, you should establish a set of risk-management rules, which should cover the number of trades you take on and how much you are willing to risk.
- Traders who fear losses are much more likely to hold onto losing positions. It is advisable that you accept short-term losses and move on to other, more-profitable trades.
What do you need to become a trader?
The cool thing is that you don’t really have to be a financial genius to profit and succeed in the world of trading. You just need to know what you’re doing. It’s like driving a car: It’s easy for those who know how, but complicated and dangerous for those who don’t. While trading Forex, or any other market, you should always be in control, fully responsible and accountable for your personal trading decisions. You may have a mentor or a team of advisors, but blindingly following them will not lead you towards success.
However, if you are about to undertake your undergraduate degree, or you are already pursuing it and you are interested in pursuing a career in trading, you should know that a business degree is not required to enter this field. It is advisable though, that whichever degree you are pursuing, you should include classes in economics, finance, maths and business.
What are Financial Markets?
In a nutshell, the financial markets are a broad term used to describe any form where buyers and sellers meet to trade assets and/or financial securities such as: Stocks, Bonds, Currencies, Commodities, amongst others. They are typically defined as having transparent pricing, basic regulations on trading, costs, fees and market forces determining the prices of securities.
The financial markets are a result of the capitalist economy, since they help to facilitate capital formation and liquidity for entrepreneurs and businesses. They create liquidity by making it easy for buyers and sellers to trade their financial holdings under one roof. In fact, they can be found in nearly every nation in the world. While some are very small with only a few participants, others – like the New York Stock Exchange (NYSE) and the Forex markets – trade trillions of dollars every day.
There are a lot of different investors who can affect the market movement, explicitly affecting different markets in various ways. An interesting but accurate title for traders is “players.” They are called players because in a way, they “play” with the market and with the way the money moves. In other words, just like in any other game, in order to play, you need to learn the rules.
The biggest market in the world is the foreign-exchange also known as Forex.
Here’s what you need to know about Forex:
- It is the easiest market to predict and analyze, as it’s too big to control by anyone because of its trading volumes (it generates between $4-$5 trillion USD worldwide – a lot)
- Forex markets are driven by the fundamental economic factors of the world we live in.
- A country’s currency is simply a monetary representation of the state of the domestic economy. The currency’s value is decided by buyers and sellers, by investors, by traders, and in our modern era, by computer algorithms.
- When it comes to the market place, the price will be set by supply and demand. When prices go up, demand goes down, when prices go down demand goes up. It’s a weird concept to understand – we know!
- Investors generally seek higher returns on their investment. They are basically sellers of money and will generally prefer to sell their money at higher prices, generating higher returns.
Are you interested in becoming a Trader?
There are courses available at the Investing Academy. The academy’s main goal is to give you all the tools you need to become a successful and profitable trader, and its lecturers are committed to make the world of online trading accessible for everyone. The teaching and trading strategies have already proved themselves with over 20 branches in 9 countries worldwide. If you’re interested in learning about the world of trading, you will want to find a course which aims to train you, not only in giving you a system and a method, but also in teaching you proper trading behavior. Here is a link to a variety of different courses Investing Academy offers.
FYI: Exclusively for EduConnect students and subscribers, Investing Academy offers a 30% discount on all of their courses.
Contact us for further details:
021 551 0143