‘To bring educational resources and personal experience to traders and Investors alike. To save you time and improve your financial performance'
This introduction to financial trading and investing is aimed at the person first looking for information on this subject.
This initial post ‘financial trading and investing' will be very broad and basic and will then dig down in future posts to discuss in greater depth.
You may be someone who has an interest or a passion who is looking to take this idea online that could potentially lead to a profitable income to enable you to leave the 9-5 grind of your working week.
Learning to trade is not something you are going to want to rush into but to find an area of trading that suits your personality and wallet because you will want to undertake a serious study of one of the many styles of trading.
I will discuss the trading styles that I myself have undertaken in the order that I have undertaken them.
I came upon forex trading when looking online for making money back in 2015. I was planning to retire in 2018 and had already looked at affiliate marketing but started getting emails and adverts showing me forex trading:
Forex trading is the buying and selling of currencies, for example, the British pound and the United States dollar GBP/USD. There are 8 major currencies traded and 24 minor currencies and then there are the exotic pairs.
Then there are different time frames to trade, short time for scalping, intermediate and long term. The next post will concentrate on Forex Trading.
This is Financial trading and investing in shares of stocks. This means buying and selling of stocks Normally a minimum of 100 shares. Again this can be short term intraday or long term several days, weeks, months or even years.
Some stocks pay dividends, another way of profiting from your stocks. Stocks can either be bought from a broker over the phone or online via a stock trading platform. We will look into this form of trading in more detail in later posts.
Is the right but not the obligation to buy or sell shares of a stock not belonging to you but being able to profit from the move of the stock. They are bought as contracts of a minimum of 100 shares.
Options can also be traded short term, intra-day, daily, weekly or monthly, however, options will be affected by time delay and can sometimes expire worthless but again I will go into greater depth in future posts.
I have not ventured into Futures trading at this time however I can give a brief outline of what they involve and again go into greater depth later.
In financial trading and investing, a futures contract is a standardised forward contract, a legal agreement to buy or sell something at a predetermined price at a specified time in the future, between parties not known to each other. The asset transacted is usually a commodity or financial instrument.Wikipedia
The aim of investing is to build wealth. This can be as simple as saving money in a bank or building society to earn interest.
Sadly the rate of interest paid from a bank or building society nowadays is negligible. Investing can include the buying and selling of real estate or property.
If you bought a property and improved it by renovation and then sold the property or rented out the property the difference minus tax is the profit. It would be seen as an asset, either in the rental from the property or the cash made, over and above the money laid out for the purchase of the property and the renovation costs.
However, if you bought a property to live in then this could be seen as liability initially as there would be ongoing cost in maintaining the property and possibly a loss in market value.
When the property is finally sold or valued in later years if the property has gained value in the market place then it will have proved to be an asset.
Investing for Retirement
You may feel you have been investing in your retirement by taking out a pension or be in a workplace pension. On retirement, you will possibly receive a lump sum plus a pension paid monthly in some circumstances or you may have a lump sum that you now need to invest in an annuity to receive the monthly income from that pension.
Other than my own experience in retiring from the national health service and receiving the lump sum and a monthly pension I do not know enough about annuities to comment here.
We talked earlier about stocks and options, stock and option investing can be rewarding but also carries risk.
Investors buy shares of stocks or options in a company. If this particular company pays dividends, then they will be rewarded regardless as long as you keep your stocks in their company.
Another way of being involved in a company is by being an angel investor.
This is where you are involved at the start of the company and invest an amount of money while the company is developing and before they get involved in the stock exchanges or may remain a private company.
Your money will grow as the company grows. It should be realised that more companies than not fail to reach this point, for every 10 companies starting out 70% approximately will fail. Of the other 30%, very good profits can be made but this is not a short term investment and could take at least 5-10 years.
Investing in Gold and precious metals is another way of investing. Gold prices go up and down as with most investments but overall they can be a good stable investment.
Buying physical Gold can be bought as bullion or coins depending on your means. Gold coins for the smaller investor are more convenient, gold bullion for the more affluent and experienced investor. We will look at this in later posts as to the buying and storage of the gold.
Investing in ourselves
The greatest investment we can make is in ourselves. Financial education, knowledge and experience gained from this are one of the most important investments we can make.
It is not only about making money but also about keeping your money. Being aware of the tax liabilities and also legal tax deductions.
Finding the right accountant for this speciality can save you and your financial investments. It can be the difference in success or failure.
There is also an investment in our health and mental well-being to be able to enjoy the profits from our financial trading and investing.
If you are interested in any form of investing and would like more information please comment below: