Both financial spread betting and physical stock trading have to do with stocks, commodities, currency. However the similarity between the two is restricted to this and the differences surface as we study the pros and cons of one versus the other.
Do you trade just as a hobby and think that you don't need to give your trading the same level of commitment, energy and strategy that you might for a business? If so, all you will ever have, is a hobby. A hobby that like many, just costs you a lot of money. However, if you are serious about trading whether or not you are wanting to replace your income or supplement it, if you do not have the following in place, then success is most likely to avoid you.
Vision. Successful traders, as businesses do, have a clear vision or picture of their business vision, purpose and mission. Your vision serves as a roadmap to help you see where you are today in relationship to where you want to be tomorrow.
Secondly, you only need to pay margin money for indulging in margined trading as opposed to making full payment for physical stock market trading. With that margin money, you also get the advantage of trading in a much higher quantity of indices or stocks.
This is the concept of leverage and it is this attraction that draws many speculators to take part in financial spread betting. If your call on a particular stock is right, you can make quick gains by just paying some margin money.
On the other hand, you can also lose money quickly if the market movement is against your bet and you are not able to hold your position and in that case, you will have to close your position or provide the additional funds required to make up the shortfall.
Risk Tolerance There are risk-loving as well as risk-averse investors. You do not have to choose to be one type or the other, but it is definitely worth assessing how much risk you are willing to take, when making an investment. Usually, the higher the risk the higher the profits are, so you really have to sit down and figure out your position, depending on your financial circumstances.
Strategy If you want to make a lot of money, you have to have a strategy on how to manage it. There are different strategies that can be applied to the different types of investment. For instance, if you buy stock, you should make a diverse portfolio. Choose a strategy and manage your assets constantly. Now you know how to start making profitable investment.
Do you trade just as a hobby and think that you don't need to give your trading the same level of commitment, energy and strategy that you might for a business? If so, all you will ever have, is a hobby. A hobby that like many, just costs you a lot of money. However, if you are serious about trading whether or not you are wanting to replace your income or supplement it, if you do not have the following in place, then success is most likely to avoid you.
Vision. Successful traders, as businesses do, have a clear vision or picture of their business vision, purpose and mission. Your vision serves as a roadmap to help you see where you are today in relationship to where you want to be tomorrow.
Secondly, you only need to pay margin money for indulging in margined trading as opposed to making full payment for physical stock market trading. With that margin money, you also get the advantage of trading in a much higher quantity of indices or stocks.
This is the concept of leverage and it is this attraction that draws many speculators to take part in financial spread betting. If your call on a particular stock is right, you can make quick gains by just paying some margin money.
On the other hand, you can also lose money quickly if the market movement is against your bet and you are not able to hold your position and in that case, you will have to close your position or provide the additional funds required to make up the shortfall.
Risk Tolerance There are risk-loving as well as risk-averse investors. You do not have to choose to be one type or the other, but it is definitely worth assessing how much risk you are willing to take, when making an investment. Usually, the higher the risk the higher the profits are, so you really have to sit down and figure out your position, depending on your financial circumstances.
Strategy If you want to make a lot of money, you have to have a strategy on how to manage it. There are different strategies that can be applied to the different types of investment. For instance, if you buy stock, you should make a diverse portfolio. Choose a strategy and manage your assets constantly. Now you know how to start making profitable investment.
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