Stock trading is currently upset by the arrival of trading on crypto-currencies, the famous bitcoin in the lead (there are in fact more 1300 other crypto-currencies), but the classic shares can still give nice performance and are safer than crypto-currencies. Here are some tips on classic stock trading and explanations and comparisons on cryptocurrency trading.
Tips for getting started with stock trading and bitcoins
Trading is an activity that is attracting growing interest. If it is practiced in the trading rooms of investment banks, it is also widely used by individuals for more than 20 years, which constitute independent operators and buy and sell shares with their computer and an internet connection. Here are some tips that will be particularly useful for you to start trading.
Think about training and getting informed
The most important advice to take into account before embarking on trading is related to learning this trade. It can be exhilarating to buy and sell stocks in a click, and make some nice profits from the comfort of your living room, but keep in mind that the risks are real. Arm yourself with patience and take the trouble to acquire solid theoretical and practical bases (tutorials, books, trading in demo mode). There are many sites and free forums trading advice. If you want to go further you can turn to technical books from specialized publishers. For example, the publisher Eyrolles which offers several very interesting books.
Be prepared to take risks and lose
It is certain that you do not go into trading to lose. However, you must be aware that on certain days, losses are inevitable, the goal being to win more often than we lose and to have gains far greater than losses. It is important to be prepared to take shots so that you can keep a cool head and not become discouraged when they occur. Emotions are the enemy of the good trader.
"If I had known ...", "I should have ...", "I'm too stupid ...", "I knew it", "I suspected it ..." etc etc ...
And all sorts of regrets are to be banished from your state of mind when you get into trading because if it is raining today, the sun still does not chase the clouds!
An interesting tip for beginners would be to invariably consider that the money they invest will not come back to them. Training, tutorials and books can not save you from mistakes: you will do many at your beginnings and even after, because in trading nothing is written but it is part of the "game". They will help you improve and define a better strategy. It goes without saying that you'd better not invest all your capital at once or concentrate it on a single action. This is the famous adage "Do not put all the eggs in one basket"
Some other tips no less important
The CAC 40 is not very suitable to live trading: a good action there caps at 15% gain per year, and a bad at a few 3%. If you want to trade something more than a stimulating activity that allows you to supplement your income, turn to the US markets that meet special conditions. Otherwise :
- Avoid looking at the stock market without a break: by staying on your screen, you can increase your stress and be tempted to buy or sell at the slightest movement
- Take advantage of tools to analyze charts (Stockcharts, Tradingview) or to find the right actions (Finviz)
- Refrain from investing against the trend
Trading may be available to anyone, but we must not lose sight of the fact that it involves risks. It would be wise to think of it as a real job and to take the time to train properly. In addition, it requires a high resistance to stress, a good capacity for analysis and adaptation, but also daring.
And cryptocurrency trading (bitcoins)?
If crypto-currency trading has been a little jungle in the early years, there are now reliable and powerful tools. One can speculate on crypto-currencies as on any classical action. In addition to the tips given above, you should know that:
- The listing is global and continues 24 / 24, there is no opening or closing price. So there is no break, no period of "respite" ...
- A cryptocurrency can take more than 50% on 24h but it can also fall by 30% over the same period (50% increase corresponds to a decrease of 30%)
- Volatility is much higher than any conventional action. A cryptocurrency can increase in one hour, from 10 to 20%, what a CAC40 action will do, with luck, in one year!
- There is no regulation since the system is global and decentralized: no one can stop the listing. A classic stock that would fall more than 30% on a day usually sees its listing suspended, which is not the case for cryptocurrencies (although states and financial institutions want to try to put in place "safeguards ")
- The biggest and best trading sites are now recognized and monitored by the financial authorities, including the US. This is the case for the group Coinbase / Gdax.
- La Cryptocurrency bubble is much faster and more important in value variation than any other financial bubble!
- Finally, and maybe one of the most important tips: manage your crypto-currencies yourself, do not delegate management to a third party, especially not your best friend!
Cryptocurrency trading can be extremely interesting but also extremely risky... after the crazy rise of December 2017 and since early January, the main crypto-currencies have fallen! Only a good reactivity makes it possible to trade correctly with crypto-currencies.
If you want to try the cryptocurrency trading, take the advice above about classic stocks, switch to 3 power and put a very small portion of your savings (you're ready to lose) ... if not, stay on stock trading. But on the merits, it is quite possible that crypto-currencies revolutionize finance and the banking world in a few years ... in 20 or 30 years? Maybe before…
In trading, nothing is written ...
As a conclusion we will quote 3 passages from the book "Chartism" by François Baron, financial analyst:
- In speculation, the safest is never certain and the least likely is always possible.
- "Getting rich while sleeping" is a fable. To want fortune too quickly, many have lost everything. Success comes through a lot of work, repeated, obstinate, littered with periods of deep doubt, bitter failures, frustrations, demoralizing fi nancial losses, abandonment ideas. But work, patience, self-criticism, humility sooner or later pay off, in any case, I hope for you.
- No method works constantly and the market itself is constantly changing. only Strong and in-depth knowledge makes it possible to adapt appropriately to these permanent changes.