Hi! Welcome to this blog of mine, this is part of a “web space” where with each topic I wish to suggest you some “food” for thought, give you tools for personal growth and evolution and show you my daily path towards tranquillity, also from the financial standpoint. Having said that I do not have any arrogance to teach anything to anyone!
As per the title of this category “Trading in Relax” is the space related to my Trading activities.
Trading…but what is trading about?
Trading literally means “a trade of goods” but according to the definition of the recent years it is the purchase and sale of said goodson the international markets accepting this type of transactions.
Which “goods” are we talking about?
IN trading you can practically buy and sell all the “primary” goods, like raw materials (from corn to oil), currencies (Euro, US Dollar up to the less known), Cryptocurrencies that are so popular in the recent times (have you ever heard of Bitcoin, Ethereum or Neo?) and obviosuly all the shares that are listed on the official markets, like Piazza Affari, US nasdaq, etc.
Can anybody Trade?
Yes, anybody owning a “risk capital” can trade, but you also need to have an open account in an “authorised platform” to manage such transactions.
Here we are, exactly….you mentioned the risk capital.
Doews it mean you can lose money if you do trading
Sure it is possible. The capital you invest changes its value every few minutes according to listings on the international markets of the goods you purchased as well as the variations of said listings as opposed to the reference asset.
Normally for us the reference asset is the Euro (or the US dollar, according to your own preferecens), because the purchased goods is paid in euro and when it is sold, generally speaking, it will be reconverted into our official currency.
If the asset listing of the purchased goos is a “negative” one, the counter value of our asset quantity, if re-converted into Euro, will have a lower value than the amount invested for the purchase and consequently you will have a “loss”.
Got it. But if it is possible to “lose” by doing trading, how can you think of “trading in relax”? If I know I can lose, for sure I will not be relaxed!
Very true! The main “issue” with trading is just that, in the face of possible and conspicuous earnings it also implies as much possibility to make losses. Even more, according to the traded “good” you will be taking quite a predictable risk of earning or loss on the basis of many parameters belonging to that good such as capitalization, volumes of daily exchanges, goods seasonality, price volatility, and on and on.
There are goods with more stable listings and rather balanced daily flucutations; others on the other hand are historically subject to extremely violent oscillations and listings very rapidly increasing or decreasing.
So the choice of the good to invest on is the primary choice to be taken according to our “risk appetite”; the second choice relates to the percentage of the invested capital to be committed on that good.
As a rule the higher the volatility of that good, the lower should be the percentage of the capital to be used, and viceversa.
A prudent management of your own capital should include a splitting amongst 5 or 6 different good sas well as a liquidity share to carry out any possible correction operations.
So let me summarise the key concepts that you will find mastered in deep in the next posts; trading means buying and selling on the international markets certain quantities of goods whose listings can vary according to our reference asset.
By selling the good, the listings increase allows to make a profit whilst the decrease of such listings produces at the same time a loss.
Given I am not a “professional trader” and I cannot foresee the listings trend of a certain good in the short or medium term (supposing that professional trader are able to do that!), how do I “trade in relax”?
Well i Hope yuo will dedicate me some more of your time and if you read the next posts I will be happy to reveal the solutions I found along my path.
For the moment I thank you for your attention and give you my regards.