The Internet has changed our business paradigm enormously over the past decade. The “middleman” in almost every venue has been “squeezed” out of the competition, producing productivity gains at every level and redistributing wealth across the globe for those that have leveraged its power. Today you can buy a car, get insurance, or even acquire a loan like a merchant cash advance with just the click of a mouse. These changes are reshaping our global marketplace. This era of globalization is marked by interconnectivity and interdependencies, and as a result, by a major dose of volatility.
Will this volatility make long-term “buy-and-hold” investment strategies obsolete? Articles are beginning to appear that debate this very topic. A vast majority of investment managers have once again been incapable of producing returns greater than our market indexes for 2011. Volatility and uncertainty are cited as the causes, but the environment is one where traders thrive, those that seek short-term gains due to fluctuations in market values.
No one is suggesting that you convert your entire stock portfolio to cash and pursue a total trading regimen full-bore, but during these strange times, it may behoove the investor to allocate a portion of his capital to trading pursuits. Our “purest” trading market is the world of foreign currencies, where “free” leverage, when used wisely, can magnify trading profits from apparent meager margin opportunities. Nearly every forex website will disclaim that leverage can also magnify losses because trading currencies is high risk. It requires specialized training and hours of practice before venturing headlong into the market.
Knowledge, experience, and emotional control are the hallmarks of success, no shortcuts allowed. Impatience and inexperience can lead to high casualty rates, so seek a mentor to guide your early moves. He will give you trading tips for what to avoid and help you develop the all-important trading plan that will facilitate a disciplined approach to the market. You must manage your capital judiciously, but average account balances today are in the $10,000 to $25,000 range – only amounts you can afford to lose.
It helps to remember the math involved – the odds are “50/50” on future price moves in the market, but if you limit losses to 10 pips (the last two decimal places on a quote) and allow winners to average 15 pips, then you shift the odds to “60/40” in your favor. If you are a disciplined trader with a well thought out plan, then over time these odds that favor you will result in consistent profits on a “net” basis. You must never be emotionally attached to a trade. You must cut losers early and allow winners to run.
Access to the Internet is all that is required. Practice demo systems allow you to fine tune your skills and develop confidence in your step-by-step approach. While online, you can also check the latest insurance quotes or seek a merchant cash advance for your business.
The Internet and the Trend are your friends!