Stock trading is currently shaken up by the arrival of cryptocurrency trading, with the famous bitcoin in the lead (there are in fact over 1300 other cryptocurrencies), but classic stocks can still perform well and are more secure than crypto-currencies. Here are some tips in classic stock trading and explanations and comparison on crypto-currency trading.
Tips for getting started in stocks and bitcoin trading
Trading is an activity that is attracting increasing interest. If it is practiced in the trading rooms of investment banks, it has also been widely used by individuals for more than 20 years, who constitute themselves independent operators and buy and sell shares with their computer and an internet connection. Here are some tips that will be particularly useful for you to start trading.
Think about training and getting information
The most important advice to take into account before embarking on trading relates to learning this trade. It can be exhilarating to buy and sell stocks with the click of a button, and make good profits from the comfort of your living room, but keep in mind that the risks are real. Arm yourself with patience and take the trouble to acquire solid theoretical and practical bases (tutorials, books, trading in demo mode). There are many sites and forums free trading advice. If you want to go further you can turn to technical books from specialized publishers. For example, the editor Eyrolles which offers several very interesting books.
Be prepared to take risks and lose
Certainly you don't go into trading to lose. However, you have to get used to the idea that there are days when losses are inevitable, the goal being to win more often than you lose and to have gains that are significantly greater than losses. It's important to be prepared to take hits so that you can keep a cool head and not get discouraged when they happen. Emotions are the enemy of the good trader.
“If I had known…”, “I should have…”, “I'm too stupid…”, “I knew it”, “I suspected it…” etc etc…
And all kinds of regrets are to be banished from your state of mind when you start trading because if it rains today, the sun is still not chasing the clouds! But before you know how to buy bitcoins, you should know that it is a market ultra volatile and ultra risky without any downward barrier, unlike conventional stock market values where quotes can be stopped in the event of a too steep drop (generally a quote is stopped around -15 to -20% per day or even less if the market capitalization is very important) ...
But it is also these risks that allow possible ultra competitive gains compared to the traditional stock market.
A pretty good tip for newbies would be to always consider that the money they invest will not come back to them. Training, tutorials and books cannot save you from mistakes: you will make many mistakes when you start and even afterwards because in trading nothing is written but it is part of the "game". They will help you improve and define a better strategy. Of course, you'd better not invest all of your capital at once or concentrate it on a single stock. This is the famous adage "Do not put all the eggs in the same basket"
Some other tips no less important
The CAC 40 is not very suitable for making a living from trading: a good action y caps at 15% gain per year, and a bad one at some 3%. If you want to trade something more than a stimulating activity that allows you to supplement your income, look to the US markets which have privileged conditions. Otherwise :
- Avoid constantly consulting the stock market: by staying glued to your screen, you can increase your stress and be tempted to buy or sell at the slightest movement
- Take the advantage of using tools to analyze charts (Stockcharts, Tradingview) or to find good stocks (Finviz)
- Refrain from investing against the trend
Trading may be accessible to anyone, but we must not lose sight of the fact that it involves risks. It would be wise to consider it as a real profession and to take the time to train in it properly. In addition, it requires a high resistance to stress, a good capacity for analysis and adaptation, but also daring.
And cryptocurrency trading (bitcoins)?
If crypto-currency trading has been a little jungle in the early years, there are now reliable and powerful tools. You can speculate on crypto-currencies like any other classic stock. In addition to the advice given above, you should know that:
- Listing is global and continuous 24 hours a day, there is no opening or closing price. There is therefore no break, no period of "respite" ...
- A cryptocurrency can take more than 50% on 24h but it can also fall by 30% over the same period (50% increase corresponds to a decrease of 30%)
- The volatility is much higher than any conventional stock. A cryptocurrency can grow in an hour, by 10-20%, which a CAC40 stock will hopefully do in a year!
- There is no regulation since the system is global and decentralized: no one can stop the listing. A classic stock that would fall by more than 30% over a day generally sees its listing suspended, which is not the case with cryptocurrencies (even if governments and financial institutions want to try to put in place "safeguards). ")
- The biggest and best trading sites are now recognized and supervised by financial authorities, particularly in the United States. This is the case for the Coinbase / Gdax group.
- La Cryptocurrency bubble is much faster and more important in value variation than any other financial bubble!
- Finally, and maybe one of the most important tips: manage your crypto-currencies yourself, do not delegate management to a third party, especially not your best friend!
Cryptocurrency trading can be extremely interesting but also extremely risky... after the crazy rise of December 2017 and since the beginning of January, the main crypto-currencies have declined! Only good reactivity allows you to trade correctly with crypto-currencies.
If you want to give cryptocurrency trading a try, take the tips above about regular stocks, switch them to the power of 3, and bet only a very small portion of your savings (that you're ready to go). to lose)…, otherwise stay on traditional stock trading. But basically, it is quite possible that crypto-currencies will revolutionize finance and the banking world in a few years ... in 20 or 30 years? Maybe before…
In trading, nothing is written ...
As a conclusion we will quote 3 passages from the book "Le Chartisme" by François Baron, financial analyst:
- In speculation, the most certain is never certain and the least probable is always possible.
- "Getting rich while sleeping" is a fable. To want fortune too quickly, many have lost everything. Success comes through a lot of work, repeated, obstinate, littered with periods of deep doubt, searing failures, frustrations, demoralizing financial losses, thoughts of abandonment. But sooner or later hard work, patience, self-criticism, humility bear fruit, in any case, I hope so for you.
- No method works constantly and the market itself is constantly changing. only solid and in-depth knowledge makes it possible to adapt with relevance to these permanent changes.