Investing is a complex and complicated game to play. There are a multitude of different markets available to trade, and yet each of them shares this single, indisputable truth. It is not a pursuit for the faint hearted or the timid, the inexperienced or the unambitious.
For those with a little bit of nous, a hunger for more, and a willingness to perfect their art, however, it can be a singularly brilliant way to bolster your income. With the right degree of dedication and talent, the profits can be phenomenal, the risks and the thrill of playing nothing short of adrenaline inducing.
Strategy, however, is everything. Investing is not a form of gambling. It is dictated far more by skill than fate, and like any academic pursuit, its brightest stars are skilled, hardworking, and utterly committed to their cause. They’ve put long hours into building a strong foundation to trade from, and it is this that continues to shore up their successes.
So how can you go about replicating their triumphs for yourself? The trick lies in three key areas.
#1: Choosing the Right Investments
There are many different areas and asset classes to invest in, and your first consideration should be which of these will best suit your goals and purposes. You should make this decision based on a number of different criteria. Firstly, how much will you have to invest? Some asset classes require a large amount of capital to begin, whilst others are far more accessible. Secondly, what is your attitude to risk like? Bonds, for example, are a brilliant choice for the risk averse, but not half as appealing for those with an eye on the prize. Thirdly, how much time will you have to devote to trading? Some markets require almost constant supervision, whilst success in others is far less time-intensive. Fourthly, when will you make your trades? Some markets operate within ordinary business hours, making them ill suited to those working around a full-time job, whilst fields such as forex are open around the clock. Do your research, answer these questions honestly, and then use your answers to find the very best fit.
#2: Choosing the Right Broker
The broker you choose will have a fundamental impact on the success of your strategy, irrespective of the markets you choose to ply. For this reason, it’s vital to get it right from the start.
The first thing to consider should be which sort of broker will best complement your portfolio. If you’re investing heavily in two or three key fields, you may find that the best course of action is to choose two or three specialist brokers skilled in navigating these individual markets. If your portfolio is more diverse, however, you may find it easier to track investments if you choose a brokerage firm specialising in multiple fields.
Your second consideration should be how much support you need. Different brokers will offer varying levels of interaction: some will leave you to your own devices; others will go so far as to invest on your behalf. Based on an honest assessment of your experience and talents, which of these would suit you best?
#3: Choosing the Right Platform
In many instances, your trading platform will act as a conduit to the markets, so it’s very important to choose one that you’re happy to use. Lots of brokers offer demo accounts to allow you to test their products before you buy, and it’s well worth taking advantage of these. Make your assessments based on a number of different factors, from the tools available, to the aesthetics, ease of use, and accessibility of various platforms. If there’s a single aspect of the product that you’re unhappy with, then look elsewhere; there are so many brokers and platforms available to choose from that you need never settle for second best.
Follow these top tips today to develop a trading strategy that really does pay.