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Wealth Management

HOW TO SUCCEED IN FINANCIAL TRADING

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by Paddy Osborn, Academic Dean at London Academy of Trading

 

Trading financial markets is not easy – and anyone who claims that there are guaranteed profits just waiting to be claimed is simply not telling the truth. Successful trading requires hard work and commitment, but also a good understanding of financial markets and how they work.

 

There are many different ways to analyse markets for speculation. You can look at fundamentals, politics or macroeconomic data to make your decisions, or maybe analyse charts and technical indicators. Whatever tools you use, there are some simple rules that you should follow to enable you to be the best trader you can be.

 

Paddy Osborn

Firstly, work hard! As in any walk of like, the harder you work at a skill, the more proficient you become, and trading is no different. There’s no short-cut to becoming a consistently profitable trader. You need to acquire the relevant knowledge, learn the practical skills, and then practise applying them (ideally with some guidance from an experienced trader or mentor) on a demo account. Only once you have a structured process in place should you start trading with real money.

 

As you progress through your training, you will build self-confidence, which you will need to pull the trigger on your trades. Believe in yourself and your ability. Once you have taken the time to develop your trading strategy, you shouldn’t be afraid to take (controlled) risk in the markets. As your experience grows, you can use your successful trades to reinforce your self-belief.

 

It goes without saying that, in order to acquire the required knowledge and skills, you need education. It’s actually possible to get lucky and make money from trading without really knowing what you’re doing, but very very few people actually achieve this. Early success – perhaps due in a large part to luck – can actually be very damaging, since it tempts people to increase risk without control, and take short cuts instead of dedicating time and effort to get a proper education. Nobody – even clever people – can learn to become a successful trader over a weekend! You need to commit time and effort to learn the skills (and practise them) to recognise how to do things right.

 

As part of the learning process, a mentor can be an extremely valuable asset. There are thousands of hours of online videos explaining how to trade financial markets, but if you don’t get feedback on your trading as you start to apply your new-found skills, you could be applying the rules wrongly without even realising. You should find a role model or mentor whose advice you trust. Don’t just ask them for trade recommendations. Ask them about their trading process; how do they approach new trades, what rules do they follow, how and when do they enter the market. Getting feedback on your performance is one of the most efficient ways to identify your weaknesses and develop your skills as a trader.

 

Once you’ve developed the required skills and have started to trade, you need to take responsibility for your actions. Some traders are quick to brag about their good trades, while blaming their losses on bad luck or difficult markets, often seeing themselves as victims. All traders lose money from time to time – it doesn’t make you a bad trader. But if you blame “the market” for your losses, then you won’t be able to recognise your own failings. You need to be honest with yourself about your trading decisions. If you fail to accept responsibility for mistakes, then you’ll keep making the same mistakes time after time.

 

This leads to another rule – learn from your mistakes. Everyone makes mistakes, but successful traders learn from their mistakes and rarely repeat them. Losing money on a trade can be painful, so it’s human nature to try to minimise this pain by brushing these bad trades under the carpet. This is the worst thing you can do! You’ve paid out some money (by losing on the trade), so make sure to get some value from it. Go back and review each trade. Are you following your normal processes? Should you have taken the trade in the first place? Could you have avoided or reduced this loss? Would you do things differently next time? This five-minute review at the end of your trading day may be the most valuable five minutes of your day.

 

Aside from needing fundamental and technical knowledge, trading is also an emotional exercise. Failing to maintain psychological control is the number one reason that traders fail to perform to their potential. Internal pressure to succeed can add to this psychological pressure, so you should try to avoid setting purely monetary goals. If you fix a monetary target each day and your day starts badly, then this pressure mounts exponentially. Instead of setting monetary goals, you should set short, medium and long term process goals. These should be specific and achievable processes which you can execute through all situations. Also, make sure to track your progress against your specific goals, and remember to review your trades to check that you are maintaining your discipline and control. If you can stick to your process goals, then you’ll trade with discipline and the profits will come.

 

Finally, patience is a virtue. Deciding not to take a trade is still making a trading decision. Don’t just enter trades because you’re sitting at your desk and you feel you should be trading. The markets are not going anywhere, and there will always been opportunities in the future. Be patient and wait for the right opportunity. Successful traders have patience, and they understand that true success takes time to achieve.

 

Wealth Management

WHAT WILL TRADING FLOORS OF A POST-COVID WORLD LOOK LIKE?

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By

Ganesh Iyer, Chief Marketing and Strategy Officer, IPC

 

The last year brought around a monumental change to the way most people work due to the impact of the pandemic, and the financial services industry was no exception. The last few months, though, have provided hope that life could very soon return to ‘normal’ with the strong vaccination efforts around the world.

This time provides the perfect opportunity for all of us to consider the best aspects of remote working in a bid to create a new concept of what a healthy work-life balance should look like. One way financial firms could achieve this is through developing distributed hub-and-spoke offices or putting in place the infrastructure so people can work on a longer-term basis from remote locations. But for this to happen, the financial services community needs to overcome the challenges of ensuring security, reliability, resilience, compliance, all while adhering to strict regulatory requirements.

 

Importance of flexibility

As we look towards the future, banks such as JP Morgan and Goldman Sachs have recently informed their employees that they should be prepared to return to offices again in the coming weeks. News like this may seem like the financial services sector is keen to return to pre-pandemic ways of working, but this is not necessarily an outlook supported by the whole industry.

For example, the Financial Times reported that there are differences between North America and Europe over the speed at which bankers should return to their desks, with some US executives calling for a swift return to pre-pandemic normality while many European banks – such as London-based HSBC and France’s Société Générale – are taking a different approach. These variations demonstrate a need for banks to remain flexible to the ever-changing circumstances and differing views, especially as the sector has been quite effective in working productively away from the trading floor.

However, even for larger institutions, the balance between flexibility, security, reliability, and scalability is a challenging task. There are many firms that are still experiencing significant pressure on costs and resources, and there is still uncertainty around what the future will bring. It is important that firms consider whether there needs to be an even split between homes and offices, or if some employees will prefer to permanently work remotely, as well as prepare for any future scenarios that may require remote working at scale again. The list of questions goes on and they may be difficult to answer, but they are fundamental to the choices that financial firms will make regarding the vendors they work with and the technologies they implement.

Fortunately, many of the elements that address these concerns already exist – it is just a matter of implementing them in a way that is right for firm-specific needs. In the last 10 years, there has been a growing trend towards firms utilising the cloud and taking advantage of the subscription model, which has enabled technology vendors to create solutions that combine flexibility with reliability, and scalability with certainty. The subscription model benefits firms of all sizes and ensures everyone has access to the same state-of-the-art technology as their competitors.

There are also several well-proven benefits of leveraging technology solutions through a subscription, or software-as-a-service (SaaS). As most businesses adopting a cloud-native environment will know, subscriptions mean companies only pay for the solutions they need, while also having the choice to expand and consume more as the business grows. A subscription model also means firms will not be implementing aging technologies, as SaaS is evergreen given it can be seamlessly updated and upgraded in the background, with new delivery channels, access mechanisms and markets added and made available on-demand.

 

Adaptable trading environment

Being able to trade at any time, from anywhere and from any device in a way that is secure and compliant is a huge competitive advantage during this uncertain climate.

For example, a newly established firm requires a solutions provider that can offer the latest, most efficient, and affordable technology that is scalable. Additionally, all businesses are now very much aware of the importance of resilience – both now and for the future – and require a solution that offers an element of futureproofing, enabling them to adapt and maintain their competitive edge for any unforeseen events or challenges that may come their way. This means technology and infrastructure providers need to provide a higher standard of service and constantly evolve, update, and upgrade their tech so that it operates seamlessly and transparently for clients.

 

Supporting the post-COVID trading world

There are many unknowns and uncertainties about what our post-COVID world will look like, but one thing that is certain is that there will be change. Regardless of whether firms choose to revert to pre-pandemic ways of working or not, almost every industry has learned valuable lessons based on the experiences of the last year of the vital need to be flexible and adaptive in order to be able to pivot in whatever direction the business needs to take to thrive and maintain resilience. By leveraging the right technologies, adopting a cloud-native environment, and using the subscription model, financial firms can ensure they are ready to embrace the working environment of the post-COVID world in whatever form it takes.

 

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Finance

A BRIEF GUIDE TO TRADING IN CRYPTOCURRENCY SECURELY

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Trading in cryptocurrency is becoming increasingly popular in the financial world. Crypto’s huge rises in value over recent months has encouraged many to consider it a valid and important way to invest their money. However, it can be tricky for someone new to the world of crypto to know how to start. The process of setting up can take a few days, but once you’re ready to go, it can be fairly simple to start trading.

 

Find A Crypto Wallet

To store crypto, you will need a cryptocurrency wallet. There are many wallets out there to choose from, in both software and hardware forms. You could choose a free to use software wallet, to begin with, and then invest in a more secure hardware wallet if you plan to hold amounts of crypto for the medium to long term. Hardware wallets typically cost anywhere from £50 to £150, so it is worth doing your homework and finding the right wallet for your needs.

 

Sign Up With A Brokerage

You will need an account with a brokerage service to begin trading. It would be best if you looked for brokerages that offer good security, an easy-to-use interface and plenty of cryptocurrencies to choose from.

You will need to provide some identification to open an account with a reputable brokerage, and it may take a few days to get your account verified. Therefore, it is vital to do your research and ensure that the brokerage you choose is legit before providing any personal information.

 

Get Help From Experts

Once you have your account up and running don’t rush to buy your first Bitcoin. As a beginner to the world of crypto trading, there are plenty of potential pitfalls, and talking to experts can go a long way to reducing the risks.

Check out Traders Of Crypto, a cryptocurrency community that provides expert, collective knowledge to those starting out with crypto trading. There you can find plenty of free guides to help you on your trading journey.

 

Choose Your Crypto

The next step is to decide on the crypto you want to trade in. There are thousands out there to choose from, with the most well-known being Bitcoin. The more popular the crypto, the more likely it is to remain stable, so it may help to start with Bitcoin for your first transactions.

Once you have some experience, you could branch out to smaller altcoins, though it is often wisest to keep most of your trades to the bigger coins.

 

Make Sure You Have The Capital

You will need sufficient capital to buy and trade cryptocurrency. You can add this to your brokerage account, typically by bank transfer or debit card payment. It is crucial to keep in mind that the value of crypto frequently changes, so ensure that you are spending only what you can afford.

 

Start Trading

You can start by either trading cash for crypto or crypto for crypto. However, keep in mind that there may be brokerage costs for each trade, so you should choose your trades wisely.

 

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