subject: Learning The Art Of Market Timing [print this page] In the recent stock market crash last year, many small investors got their fingers burnt. All of a sudden they lost 70-80% of their retirement accounts. Stocks have always been considered to be the traditional form of investment. The proven and tested method of becoming rich.
However, with the advent of computer and the internet, the investment landscape has changed a lot. Internet revolution has made possible online trading. Now any small investor can trade different markets from the comfort of their home. You can open an account with Ameritrade, Scottrade, eTrade, Think or Swim and so on and trade stocks in US Markets from anywhere in the world. Similarly, GLOBEX platform allows you to trade different stock index futures contracts.
There has been an explosion in the retail forex industry. This is the hottest online trading sector. There are many brokers now also known as FCMs trying to entice people to start trading forex. Forex the hottest market right now. After the stock market crash of 2008, many people have turned towards forex. Forex trading is being called the recession proof business of the 21st century. You see in the stock market, either the market sentiment is bullish or bearish. But in case of forex market, their is neither a bull market nor a bear market. If one currency in the pair goes up, the other invariably goes down.
Forex trading has opened up many exciting possibilities for retail investors like you and me. You can even start trading with $500 when you open a mini account with your broker. Brokers allow leverage as high 1:400 meaning that for every $1 that you have, your broker allows you $400 to trade. Well, this much level of leverage is dangerous and many people get their fingers burnt. Don't use more than 1:5 leverage level. When you become highly experienced you can increase your level of risk taking.
Forex markets are huge. Daily more than $3.2 trillion get transacted in the global forex markets. Forex market is open 24/5 meaning there is continous 24 hour round the clock action in forex. This is unlike stocks where you can trade stocks only during the trading hours in the stock exchange. This makes forex trading more exciting as compared to stock trading as you can choose your own time that suits you best to trade. Forex trading is expected to make many millionaires in the coming decade.
A market timer is always looking at opportunities in different markets. A market timer keeps on watching different markets and jumps in at the right time and get out that the right time to make maximum returns with minimum risk. Like the forex market, commodity markets are expected to experience decades long boom in the first part of 21st century.
The essence of what I am saying is 21st century belongs to those traders and investors who know how to trade different markets as the opportunity shifts from one market to another. You need to become a Universal Market Trader if you want to become a millionaire in the new decade!
by: Ahmad Hassam
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