Someone who appears to be a trader loses all credit with many people right away. At the “World of Trading”, about 4,000 such exotics met on the weekend. We tried to find out what drives them and where the traps lurk.
The world of traders – anyone who dives into it needs courage. Not only because he runs the risk of losing his money when trading cryptocurrencies, Stocks, Forex and leverage products quickly, but also because trading is frowned upon in society. However, it has to be said that this was way more the case in former times than it is today as the number of stock market investors has dramatically increased in the corona crisis Marsh ’20 stock market and Bitcoin crash. Many people tried to catch those lows who hadn’t been invested in such assets before, which led to a dramatic retracement in the price charts within the next couple of weeks.
But long term investors are still something else than day traders who make their living from chasing price movements.
How Traders Are Seen By Other People
This is how many people imagine a trader to be: A person sits alone in front of his computer, prices flicker on the screen and every few minutes – or even seconds – he places a buy or sell order. Sometimes he is betting on rising, sometimes on falling prices, sometimes he is trading with a real share and sometimes with bonds, behind which there is no real value at all.
“Trading signal, ready, go” is the motto of traders. Not only do the latest prices flicker constantly on the screen, the charts are also updated every second together with the technical auxiliary lines. And thus the trader bets sometimes on rising, sometimes on falling prices – depending on which way the indicators show him.
That sounds exciting and at the same time sounds like a lot of money. But even if that might be the case, investors should never blindly plunge into trading. On the one hand, it is important to know the functions of the technical tools exactly, and on the other hand to heed simple stock exchange rules such as “Never bet everything on one horse” or “Let profits run, limit losses”. In addition, timing is crucial for trading. Before each purchase, therefore, not just a single indicator should be considered in isolation.
In general, however, trading is not only reserved for professionals. Each average investor today has simple access to charting services, trading platforms and assets like cryptocurrencies or stocks and can develop strategies here. Depending on the underlying, direct investments are then possible or products such as mini futures, warrants or CFDs can be used.
Due to their leverage functions, these have the advantage that less capital is required. However, disproportionately high losses up to total loss – for example in the case of a liquidation – are also possible. In crypto trading there are also brokers offering margin trading, which is leveraged trading with real cryptos, no CFDs. BitcoinTradingSites.net shows all popular brokers for traders who prefer to perform leveraged Bitcoin trades.
In short: A trader using leverage is a gambler.
There’s no doubt that the World of Trading is home to many people who are well suited to this cliché. But there are also those visitors who are still cautiously approaching trading – but often with big goals.
Trader With Big Goals
So is a law student who is about to graduate. “I’m at this event for the third time,” he says. He has informed himself for a long time and read a lot, only six months ago he started trading actively and prefers cryptocurrency exchange. He wants to trade seriously and permanently. He doesn’t see himself as a gambler. “If I wanted to gamble, I’d go to the casino around the corner or in a nice high end one with roulette table and champaign,” he says.
The budding lawyer hopes to make a living from trading in his future so he will be financially independent and won’t have to rely on his education and the job market. His approach sounds solid, but his yield dream could quickly burst in day trading. “If one earns with an initial sum of only 2500 euro over a period of three years, thus altogether 600 trading days, daily only one per cent net yield, one arrives at a considerable final sum of 4 million euro gross, nevertheless 2 million euro net, as calculated. “I find this idea simply gigantic. Stocktrader.com shows 9 great tips to make the game in the long run.
Being independent, earning a lot of money and not even leaving your desk at home. For some, this sounds like paradise. But James Steelberg, who is a trader himself with years of experience and has read plenty of trading books, quickly brings such dreamers back to the facts: “Trading doesn’t work that way, I can’t calculate the sum x every day. I only have a statistical expectation of my system.”