Different types of Trading

In life there is a saying that goes... "The more I learn, the more I realize how much I don't know" or "as soon as you start learning about something you realise how little you actually knew in the first place, this is also very true with trading, there are many levels and dimensions to trading, if you're the type of person that likes reading and getting as much information on a subject before you getting your hands dirty here's a few links below. We believe these should give you the basic understanding and concepts to trading and shape your approach on getting into trading professionally.


The reason there is so much confusion and hope in trading is because the term is simply misused. To give you an example, of what we mean by this let's illustrate with the word love. Many people today mistake or misrepresent love for some other feelings and such leads to much confusion that when talking about real romantic love we have to use the word "true love". Now with trading, many of us have heard or seen movies about stockbrokers on huge salaries coupled with crazy bonuses. The stock markets seems so attractive, like it's just waiting to hand you millions. Truth is many people don't actually get involved with the real stock market.
There are many people to blame for all the confusion, including brokers, marketeers, self-proclaimed traders and advertisers. But before we explain how, let's differentiate between what the guys "making millions" do and what you're attempting to do.
The financial industry is no place for small starters and ambitious climbers, in many countries things have been put in to place to control the flows. For example in the UK, we have governing bodies such as the FCA (Financial Conduct Authority) these guys make sure that all financial matters are done lawfully and properly... but they also do much more indirectly on the other end of the scale we have HMRC (Her Majesty Revenue and Customers), they are in charge of collecting tax revenue from all income and profits generated from businesses and individuals.
Now the typical "trader" you normally hear about is actually a stockbroker. This is a qualified and licensed professional with a considerable amount of experience in the industry. A stockbroker is not a day-trader at all, let's explain.
A stock broker has access to different stocks via various stock exchanges. The stock exchange allows certain people to buy and sells stocks to and from their exchange. In order to do this you will need to have certain licenses as previously explained. During a stockbrokers career he would have attained many clients, mostly wealthy and high-net-worth individuals. These ones have a lot of capital but will not have direct accessibility to invest or buy stocks and shares from a company. So what they will do is contact their "stockbroker". He will then, on their behalf, buy the shares and keep his client informed on the companies performance. Now it's back to the client to decide when he wants to exits that particular investment.
By now you must be wondering, how does the stockbroker make money then? Well this is the interesting part and will act as an eye opener on how money in finance works. The stockbroker will take a commission when you sell your position in profit. For example, you buy 1000 stock in a company with a share price of £13 in February and then in March the share price increases to £15 and you decided to sell all of you stock. You should have made £2000 profit. £13000 invested, £15000 returned. However on receiving your profits your stockbroker will take "a cut" in this example 5%. So you actually get back £1900. This example makes it clear that a stock broker only benefits from his clients being "active" by giving him orders to make on their behalf.
Now let's go a bit deeper, what if the client here in our example didn't want to sell his stock in March, but would rather wait and hold for lets says 30 more months. You would probably expect the stockbroker to be happy with this idea as his cut will be more as this seems like a high growth stock. No. Stockbrokers don't take risks, they let their clients do all the risk taking. So rather than waiting in hope of a larger payout they will charge you a holding fee some charge monthly, other weekly and some even daily! Bear in mind that the stockbroker hasn't forfeited his 5% cut when his client sells.
Understanding this will make it much more easier to understand why stockbrokers are constantly scouring the markets looking for opportunity to present to their clients. They want you (their clients) to take the risk! A good stockbroker with a selected few clients will normally do his job correctly in where both parties get rewarded and business is pleasant. However, in our internet age, where anybody can be anybody and companies have no faces behind them. When times become hard brokers with mass clients, as sinister as this may sound, will create fake opportunities and entice their clients to get on-board before the "opportunity passes". Bad stockbrokers do this and nearly every online CFD broker commits this practice.
In the ideal scenario, the investor (brokers client) gets a nice payout and the stockbroker gets a nice commission. Some high performing stockbrokers will undoubtedly take all the credit for their winnings and this one of the main places where the idea of "one-man traders" come from. You get your individual traders from top performing Delta One traders as well but rarely will they quit their extremely high paying job to take on untold risk. We've covered how brokers play a role in the confusion to find out how marketeers, self-proclaimed traders and advertisers play a role read: Sure-Money vs Risk-Money



Other helpful resources:
https://en.wikipedia.org/wiki/Financial_market http://www.investopedia.com/ http://www.investing.com/ https://www.tradingview.com

Cut to the chase
If you seriously want to be part of the 5% traders that are profitable, then you have to be brutally honest with yourself.
Take our 2 minute self-check to see whether you're ready to be profitable:

  1. Do I only trade with edge?
  2. Do I have an exit strategy before I place a trade?
  3. When a trade goes sour do I stick to my exit strategy regardless of the outcome whilst in the moment?
  4. Do I feel upset, down and miserable after taking losses?
  5. Do I focus on how much money I would like to make?
  6. Do I frequently try to correct bad trades by adding more trades?
  7. After a run of losses do I increase my next trade to make up for it?
  8. Is my self-talk upbuilding or discouraging throughout the day?
  9. Do I stick to my computer like glue throughtout a trading day?
  10. Do I exercise or go to the gym regularly?
  11. Do I find myself trading because of boredom?
  12. Do I look around for "trading tip offs" or "analysis" from people in my trading room?
  13. Do I take trading as serious as any other profession or is this my "side hustle", "supporting income"?

FBR Trading Team Golden Rule: Edge > Discipline > Psychology

  • • Upfront-Limited Risk
  • • Borderline Gambling
  • • High Return Deals
  • • Quick Outcomes

Short description:
Binary options aerdsedfeerwfefwf ewfew fwef awer rf al;un ;ofn;aifu fyui brlf irfau nfrugn ariug drf igb fiug a

Example
An example of a binary option could be an estimation of whether the share price of a firm will rise to over $30 on, say, Tuesday 1st June at 11.00 am. When this time arrives, if the firm’s share price has increased to $31, the trader will receive their predefined sum of profit, whereas if it is below that $30 mark the trader will lose the money which they put into the trade. This type of binary option is called high/low trading, where the trader’s success or failure is dependent on a security’s value being either higher or lower when the trade expires.

If trading currency pairs like in the pitcure below, you trade whether the base currency will go up or down. AUD in AUD/USD is the base currency and USD in AUD/USD is the quote currency. If we place a call trade with $100 the broker is cutrnyly paying out $181 if by 09:30 AUD/USD is above 0.93294.

  • • Upfront-Limited Risk
  • • High Return Deals
  • • Limited Risk

Short description:
Binary options aerdsedfeerwfefwf ewfew fwef awer rf al;un ;ofn;aifu fyui brlf irfau nfrugn ariug drf igb fiug a

Example
An example of a binary option could be an estimation of whether the share price of a firm will rise to over $30 on, say, Tuesday 1st June at 11.00 am. When this time arrives, if the firm’s share price has increased to $31, the trader will receive their predefined sum of profit, whereas if it is below that $30 mark the trader will lose the money which they put into the trade. This type of binary option is called high/low trading, where the trader’s success or failure is dependent on a security’s value being either higher or lower when the trade expires.

If trading currency pairs like in the pitcure below, you trade whether the base currency will go up or down. AUD in AUD/USD is the base currency and USD in AUD/USD is the quote currency. If we place a call trade with $100 the broker is cutrnyly paying out $181 if by 09:30 AUD/USD is above 0.93294.

  • • High Risk
  • • High Volatility
  • • Limited Risk

Short description:
The underlying assets for a index is usually a number of top performing companies in a country for example the FTSE100 consist of the UK's top 100

Example
An example of a binary option could be an estimation of whether the share price of a firm will rise to over $30 on, say, Tuesday 1st June at 11.00 am. When this time arrives, if the firm’s share price has increased to $31, the trader will receive their predefined sum of profit, whereas if it is below that $30 mark the trader will lose the money which they put into the trade. This type of binary option is called high/low trading, where the trader’s success or failure is dependent on a security’s value being either higher or lower when the trade expires.

If trading currency pairs like in the pitcure below, you trade whether the base currency will go up or down. AUD in AUD/USD is the base currency and USD in AUD/USD is the quote currency. If we place a call trade with $100 the broker is cutrnyly paying out $181 if by 09:30 AUD/USD is above 0.93294.

  • • High Risk
  • • Low Volatility
  • • Limited Risk

Short description:
The underlying asset for a commodity is the 'going' price that companues are using for example coffee beans

Example
An example of a binary option could be an estimation of whether the share price of a firm will rise to over $30 on, say, Tuesday 1st June at 11.00 am. When this time arrives, if the firm’s share price has increased to $31, the trader will receive their predefined sum of profit, whereas if it is below that $30 mark the trader will lose the money which they put into the trade. This type of binary option is called high/low trading, where the trader’s success or failure is dependent on a security’s value being either higher or lower when the trade expires.

If trading currency pairs like in the pitcure below, you trade whether the base currency will go up or down. AUD in AUD/USD is the base currency and USD in AUD/USD is the quote currency. If we place a call trade with $100 the broker is cutrnyly paying out $181 if by 09:30 AUD/USD is above 0.93294.

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Which is best for you


Risky-type trader - Make a lot of money with in a short time | Your time available to trade 1/5

Risky trader - Make a lot of money with in a short time | Your time available to trade 1/5

Risky trader - Make a lot of money with in a short time | Your time available to trade 1/5

Level-headed-type trader - Make a lot of wins and losses with in a short time | Your time available to trade 1/5

Economical-type trader - Make a lot of money only during eventfull times | Your time available to trade 1/5

Risky adverse-type trader - Make a lot of money with in a short time | Your time available to trade 1/5

A key part of trading succesfully is money management, your aim should be to become profitable whilst taking minimal losses. Below is a table of what wAdvised minimum amount of capital needed for getting started with trading

I want to trade and I have year of trading experience. This is the advised capital needed to start trading
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