Online trading has been a buzzword for quite a while now but it seems that the latest developments in the world have made this financial activity more popular than ever. Well, in this day and age, everyone can become a trader, taking advantage of numerous platforms that bring global markets right to the screens of their desktop or mobile devices. Trading, however, is much more than selling and buying stocks, futures, or any other assets because trading is fun only when it’s a success story.
Despite what many think, the latter is not a question of good luck but deep knowledge and understanding of the matter, and, of course, experience. This is not to say, trading is not for newbies, this is to say nobody should take it lightly or such carelessness can cost them dearly. Practice shows that newly-minted traders often do not know much about the assets they deal with, leaving too many things to chance and missing really good opportunities. Do not forget that trading is all about trends, which, by the way, can change very quickly, seeking lightning-fast reaction and the right choice.
This article is focused on the current trends and 4 assets that you can safely trade during the pandemic, of course, if you’re pretty sure you have enough knowledge and a great strategy to reach your goals.
If you follow the news at home and around and have a keen interest in politics, then you can try your hand at trading currencies. At the core, the concept of Forex Tradingis pretty simple and based on the comparison of two currencies, pairs – it’s what binary options are about. As you have certainly already known, currencies are traded at the foreign exchange market that is nothing but a global crazy busy marketplace that stretches from London to Hong Kong and from New York to Sydney, covering a host of the world’s major financial centers.
With currencies, you always trade in pairs, trying to predict the direction their ratio is going to move, naturally, before the expiration time. Some national currencies are in higher demand than others, meaning some pairs are common, some are not. As already mentioned, plenty of things that happen in the political and economical scenes can affect the movement, hence make sure to avoid intensive activity when the situation is unstable or in the anticipation of big announcements.
No doubt, stocks are one of the most popular financial instruments among traders. First of all, they are also simple to buy and sell, secondly, they have an impressive money-making potential. Indices are different in the way you trade on them because in contrast to stocks, you don’t predict movements of individual stocks or shares but the performance of a certain index (for example Dow Jones, NASDAQ, or FTSE 100) as a whole, including all the companies it spans. Regardless of whether you choose to deal with stocks or indices, you will need a decent knowledge of the market (or markets) you are trading in, as well as current trends that affect the situation. Even though gold is certainly among the most known commodities, this sector is far more massive and diverse than the majority of people think. Coffee, sugar, and omnipresent corn are also valuable commodities, as well as a heck of a lot of other products we can’t imagine our lives without. In short, the term “commodities” covers all the products given to us by mother nature, from precious metals to wheat. As things stand now, gold and oil still rule over the market, being the most popular type of trading assets. Led by Bitcoin, cryptocurrencies are gaining momentum worldwide, with more and more traders switching to digital assets that are owned by no one and governed by no authority. Over the last few months, we have witnessed some record-breaking prices reached by BTC – the pandemic turned to be favorable for altcoins and Bitcoin especially. However, do not rush with conclusions – the absence of a regulator also means the absence of backing in the form of another asset (gold, for instance). That’s why the price of cryptocurrencies comes with high volatility, often showing sharp rises and significant drops.
Back to what we said at the beginning of this article, the choice of assets is of utmost importance, especially for rookies. Choose right and hit the road to success, choose wrong, and… well, you got the idea. If you ask seasoned traders where to start, they will tell you that the best thing you can do is to focus on the assets you are well-versed in or, if anything, those you know best in comparison with other options.
Liquidity is another significant factor to consider because nobody wants to trade on assets that are not in demand, hence make sure your next trade is on assets with high liquidity. The simplest explanation is that a currency pair GBP/EUR is more liquid than GBP/CAD. By the way, CHF is still considered one of the safest FIAT currencies to trade.
Now, it’s time to mention the price action, another crucial element of the trading story. Even though there are numerous eventual trends and choices, the one thing is for sure – you don’t want the price that is “lazy” to move. You need a trend, upward or downward, but a trend that lets you get the most of your money in the shortest possible time. So, you better have a viable strategy and hit it really big.
Just a heads up, when you are at the very beginning of your journey towards a successful trader, avoid at any cost dealing with securities that most likely are going to be exposed to significant changes caused by the upcoming decision of respective authorities. When you become a pro, you’ll have loads of chances to show your skills of trading in volatile markets.
Pandemic has obviously had a significant effect on financial markets, encouraging traders to look for new opportunities to gain revenues. Making the right choice of the assets to trade on and having a viable strategy are keys to success.