February 15, 2010 at 00:52Trading Part 1
Reading Habr, noticed that from time to time episodic articles about game on a stock exchange slip here. Since my work is closely related to this issue, and I decided to write a test article on this topic for Habr, it may be useful for readers and will help clarify a little how things are in this area.
If you ever thought that you should try what the exchange is, if the quanta of the exchange-related information field leave a mark on the grid of your perception, you will certainly be bombed by all kinds of interested sources and be confused by messages about how easy it is to trade on the exchange. How simply buying cheaply (stocks, currencies, etc.) and selling them expensive to earn without leaving your home in 2 clicks will draw all sorts of beautiful graphs of multi-hundred and many-thousandth annual income percentages. Their goal is to draw you into this pool through your office and charge you for transactions (for spreads), get a free loan in the form of your funds in your account for your own operations. They do not care about your well-being, no matter how much they say that they want to help you increase your capital. In general, don’t trust anyone who says
If you nevertheless find yourself in a state in which the thought that you need to try it does not give you rest, first of all, you need to decide for what? If for education / entertainment / satisfying curiosity - you can safely allocate a small amount for this toy and drive, for example, one share of Gazprom, or a lot of Eurodollars, but remember: at a certain stage the excitement can seize you and demand to bring more money into this firebox. Not sure if you can stop? Then it’s better not to start.
Another situation is when the exchange is considered as a tool for additional earnings. For example, you are accumulating capital for a serious purchase (apartments, cars, etc.), and it’s just that your capital is accumulating, and the idea that “money should work” is increasingly haunting you. One thing to understand: how willing are you to play with risk? I must say the risk is not some imperceptible thing that can happen to your money if you are very unlucky. Risk is the real chance of losing money. For some reason, this truth is realized only after the first losses. If you have a plan for the accumulation of capital for a certain period, and you are not ready to put up with the fact that it is possible, your actions will lead to the fact that these plans move far behind in time - it is better not to start, but to open a deposit in the bank.
Suppose you understand the risk, and are consciously ready to take it, playing on your own capital. Remember, there is no free money in nature. Everyone who is on the other side came to the exchange for the same, among them there are many professional players with vast experience and the size of capital. Ask yourself, what are your advantages over them? The next question to ask yourself is, how are you going to trade? Will this be your main occupation, or are you planning to combine work on the exchange (trading) with your main job? How will you make transactions in the second case? I do not deny that this is possible, but these two classes will definitely interfere with each other.
Let's say you choose the first option. Are you going to master the profession of a trader and want to receive income only from exchange trading? Is it possible? Yes, it is possible, but it should be remembered that this is one of the most complex types of business. You probably have to go a long way, survive a lot of losses, before you start more or less stable earning by trading (if this happens at all). And one more thing to remember: no matter how professional a trader would be, this does not save him from losses and mistakes. If you have an idea that certain experience and knowledge in trading will give you stable prosperity, think about those people who were engaged in investment activities in famous American banks with a long history, from whose bankruptcy the financial crisis of 2008 began. It is unlikely that incompetent people worked there.
Continued here
If you ever thought that you should try what the exchange is, if the quanta of the exchange-related information field leave a mark on the grid of your perception, you will certainly be bombed by all kinds of interested sources and be confused by messages about how easy it is to trade on the exchange. How simply buying cheaply (stocks, currencies, etc.) and selling them expensive to earn without leaving your home in 2 clicks will draw all sorts of beautiful graphs of multi-hundred and many-thousandth annual income percentages. Their goal is to draw you into this pool through your office and charge you for transactions (for spreads), get a free loan in the form of your funds in your account for your own operations. They do not care about your well-being, no matter how much they say that they want to help you increase your capital. In general, don’t trust anyone who says
If you nevertheless find yourself in a state in which the thought that you need to try it does not give you rest, first of all, you need to decide for what? If for education / entertainment / satisfying curiosity - you can safely allocate a small amount for this toy and drive, for example, one share of Gazprom, or a lot of Eurodollars, but remember: at a certain stage the excitement can seize you and demand to bring more money into this firebox. Not sure if you can stop? Then it’s better not to start.
Another situation is when the exchange is considered as a tool for additional earnings. For example, you are accumulating capital for a serious purchase (apartments, cars, etc.), and it’s just that your capital is accumulating, and the idea that “money should work” is increasingly haunting you. One thing to understand: how willing are you to play with risk? I must say the risk is not some imperceptible thing that can happen to your money if you are very unlucky. Risk is the real chance of losing money. For some reason, this truth is realized only after the first losses. If you have a plan for the accumulation of capital for a certain period, and you are not ready to put up with the fact that it is possible, your actions will lead to the fact that these plans move far behind in time - it is better not to start, but to open a deposit in the bank.
Suppose you understand the risk, and are consciously ready to take it, playing on your own capital. Remember, there is no free money in nature. Everyone who is on the other side came to the exchange for the same, among them there are many professional players with vast experience and the size of capital. Ask yourself, what are your advantages over them? The next question to ask yourself is, how are you going to trade? Will this be your main occupation, or are you planning to combine work on the exchange (trading) with your main job? How will you make transactions in the second case? I do not deny that this is possible, but these two classes will definitely interfere with each other.
Let's say you choose the first option. Are you going to master the profession of a trader and want to receive income only from exchange trading? Is it possible? Yes, it is possible, but it should be remembered that this is one of the most complex types of business. You probably have to go a long way, survive a lot of losses, before you start more or less stable earning by trading (if this happens at all). And one more thing to remember: no matter how professional a trader would be, this does not save him from losses and mistakes. If you have an idea that certain experience and knowledge in trading will give you stable prosperity, think about those people who were engaged in investment activities in famous American banks with a long history, from whose bankruptcy the financial crisis of 2008 began. It is unlikely that incompetent people worked there.
Continued here