A good business owner should be able to walk away from the business for a year and come back to find it running better than before. There are several important factors to keep in mind: Diversify your account with over 11, mutual funds to choose from. An investor should understand these and additional risks before trading. The OFS Trading System is appropriate for online forex trading as well as for online binary options trading.
Styles range from aggressive day traders looking to scalp a few point gains, to investors who are looking to capitalise on long-term macro economic trends. In between, there are a whole host of possible combinations including swing traders, position traders, aggressive growth investors, value investors and contrarians. Greg is a year-old father of three who works full time at a city-based telecommunications company. When Greg first set out to trade, he set the objective of making the maximum he could in short-term trading to help supplement his income.
Shorter term trading requires a higher number of trades, which, for a time-poor person, is difficult to manage. To help you decide whether a short- or long-term trading system will better suit your objectives, see table 3.
Given there are pros and cons for each trading style, it is important that you set realistic expectations relative to the level of risk you are prepared to assume. Moreover, your style will depend on your level of commitment.
Day traders are likely to pursue an aggressive style with high activity levels. The goals would be focused on quick trades, small profits and very tight stop-loss levels. Intraday charts would be used to provide timely entry and exit points. A high level of commitment, as well as focus and energy, would be required. Unlike day traders, position traders are likely to use daily end-of-day charts and pursue longer trends.
The goal in this case is to be focused on short to intermediate price movements and the level of commitment would be less than a day trader. With this in mind, be sure to define your trading objectives as best as you can, since your system must match your own criteria or you will never make big profits see chapter 1.
With a few portfolio objectives defined, your next step is to decide in which market you are going to trade. There are many trading instruments to choose from, but to meet your objectives, you must choose only one. Trade one system, on one market. To select the most appropriate market, I suggest you pick a market you are familiar with or one in which you would ultimately like to trade.
Although there are exceptions and different strategies that will alter the characteristics of these markets, as a general rule, below are typical features of each market. They are listed from the most straightforward stocks to most complex forex. Plain and simple, stocks represent a share in the ownership of a company. Stocks trade on a stock exchange, which is basically a venue to buy or sell a stock.
In this arena, big players such as Warren Buffet, Merrill Lynch and other big banks dominate. There is a tendency for new traders to go for higher leveraged instruments because of the return, but you must remember that the higher return the higher the risk. In short, start with stocks. Options are leveraged instruments that derive their price from underlying securities such as stocks. They give the buyer the right, but not the obligation, to buy or sell an underlying asset at a specific price on or before a certain date.
So, unlike stocks, which represent equity in a company and can be held for a long time if not indefinitely , options contracts have finite lives. Options are the next step up from stocks in their complexity. They introduce the opportunity to leverage your money and increase profits. A word of advice on options: You never want to be dealing directly with the market maker because they will put the odds in their favour by setting a wide spread. Where the spread is the difference between the highest bid and the lowest offer.
In a similar vein to options, futures contracts also have finite lives. They are primarily used for hedging commodity price fluctuation risks or for taking advantage of short-term price movements.
The buyer of the futures contract agrees on a fixed purchase price to buy the underlying commodity wheat, gold or T-bills, etc. This differs from options where the buyer has the right to purchase the underlying commodity but is not obligated to do so.
This creates profits or losses for the trader. Futures trading is one of the more complex forms of trading, but along with the increase in the skill level required, there are greater rewards in terms of return on investment. Commodities trading can be a great stepping stone towards trading more advanced markets. CFDs derive their price from an underlying security and can be placed on virtually anything. The CFD providers, in effect, end up becoming the market, setting the buy and sell prices.
They make their money in one of two ways: CFDs are popular at the moment because they allow you to trade both sides of the market long and short.
In this case though, there are actually no shares involved; instead, the broker agrees to pay the difference between the starting share price and the price when the contract closes. Forex trading can be fast and furious.
When trading any leveraged product, you are faced with a double-edged sword. On the one hand, the leverage will increase your winning trades, however on the other hand, it will also increase your losing trades.
The secret to successful trading is to first learn to trade unleveraged markets profitably and then take this system and increase the leverage gradually. In this way you will clearly understand the risks involved and also position yourself for the best possible chance at success. What do you want to trade? Choose just one of the markets I have covered in this chapter.
Moreover, what makes this course so invaluable to the beginner, and even the advanced trader, is that you will learn the key principles to trade multiple markets. With this knowledge, you can then choose the market that makes most sense to you and choose the best trading system for you.
Answer the portfolio objectives questions listed in this chapter. From the list, select a trading market you are familiar with or one in which you would ultimately like to trade. Hi I am a trader holding positions in stocks for days and weeks. My entry and exits are very late as my system is based on 2 moving average crosses. Many times it results in to losses.
One major problem always is i can never figure out how far the present rally would go — 1 day, 10 days, days. So there is always an element which i call — gambling. I get get 5 ralls of 1 day each and my capital will be wiped out. Please share your trading system or please suggest 1 or 2 most appropriate trading systems just to learn. The key is in your exits… you really need to hone your initial and trailing stops.
I trade forex from june 09 not very succesful and I never lost more than my Stop Loss………………. Thanks for your question. A stop loss is a great way as you noted to limit your losses. Hi David, I am looking at setting up another cheaper trading account that is of lower cost to my bank based online trading account.
I am trying to stay away from the market makers and go for direct to market. My questions is- How do I know that the provider I go with will be a true direct market access and not a market maker. If a provider is creating the market, they are market makers. In answer to your question, perhaps you can just ask them… are they creating the market or do they simply give access to the market.
I made a profitable trade on commodities index once only to see it be a loss once it was converted back into Aussie dollars. Unfortunately his answer was disappointing however I understood his outlook is far far longer term than most of us,,and he no doubt manages it through hedging etc.
The problem is that there are so many markets to choose within, with ETFs… I started with gold, then jumped to stocks and inflation linked bonds, trying to follow some principles of intermarket analysis.
So, my first decision is to select only one market may be a bond or stock market which gave robust results with my simple trend following system; then go with it. So, effectively, my trading is now a short term one. To summarize, my impression is that I am too much wandering among markets and styles, and that I should learn to be more consistent.
What do you think? Thanks for your honest, open comment. Have you developed your trading plan yet? One of the first steps is to pick one market and find a style that suits you. Ofcourse, if one wants help with that process, Van will sell yet another course on How to design a system that fits you!!!
I am going to share with you far better and more effective ways to design profitable trading systems. The fact is, I can show you how to be successful trading, but it will take work! Let me share with you my step-by-step, blueprint anyone can follow to design profitable, part time trading systems — tailored to your unique situation. And with that, I have one final comment to make…. Ready to get started? Click here to read more about David. To grab the book check out http: Visit my site http: I want good and excellent and genuine forex signal providers can any one tell me and give their contact address.
Wow, that is a really cool concept. I like the no-nonsense approach, which is really lacking online in many areas. Thanks for the information. Email will not be published required. But why am I sharing this information? And with that, I have one final comment to make… Please understand, becoming a successful trader takes work! David presenting live his workshop. Etim Umoh April 3, at 7: Hi David This is great, but I need to see it. How can I get the book? Waiting to hear from you.