Trading The Markets

What follows are only my opinions.
What are the Markets. There are literally 100,s of tradable markets out there of which different instruments can be traded. Here I am talking about the likes of Options, Foreign Exchange, Futures, Commodities CFD’s (Contracts for Difference), Indices, etc. The market is Huuuge. The largest being the foreign exchange market which is 24hrs a day and I believe trades approximately (and don’t quote me on this) 4 TRILLION Dollars EACH DAY. Surely we can all have a bit of that, but we have to educate ourselves on how we can extract some of it as opposed to donating to it.

Now without turning anybody off, bear with me here. This is only MY OPINION and it’s how I look at trading in general.

There are two ways to trade. Either by FUNDAMENTAL analysis or by TECHNICAL analysis.  Some people like to use both. Any other way would either be gambling or insider trading.  I am a Pure TA trader (as I will refer from now on). I don’t give two hoots about all those P/E rations and balance sheets etc. Fundamental analysis is opinion based whereas TA shows what is actually going on as it happens. TA methods can be traded on any sort of time frame ie minute by minute, hour by hour, day by day and month by month etc. See the other blogs for more explanations on these topic areas. I can talk about this stuff all day.

Whether I am trading fx, options, cfd’s, futures or the index at the end of the day I am looking at a few lines on a chart deciding weather or not I think the movements are going to go up, down or sideways. The only difference I see by trading the various markets is the way the trades are executed, the margins are calculated and more importantly how easy it is to minimise and control risk.

So when I see news readers talking about the FTSE100 or the NASDAQ and what the different markets are doing. I don’t really care because at the end of the day the market will do what it does and not what people think it will, hence I trade what I see on the charts.

The thing that scares most people are the words.  Say you trade the FTSE100 index to someone and see what response you get.  “Ooo that’s a bit risky, wrong time of year for that” Another good one is “The dollar not looking too good is it”  Why should I care when I can make money when the dollar value is going up or down.

Bottom line is, don’t let words like Options, FX, or the S&P make things sound more complicated than they actually are.