Get rid of your misconceptions about the markets
by Werner Hochleitner
When you start getting involved in the markets, you will confronted with some more or less "challenging" questions from your environment. At least I had to face such questions. Oh, and dialogs like this
Isn´t that some sort of gambling?
If it´s that easy, why isn´t everybody doing it?
- Its NOT easy, thats why 90% fail
So why do you think you could be one of the 10%?
- Because I am persistant, I´m eager to learn and I´m certain I can succeed
But that costs money right? What if you lose all your money?
- Thats why I start with a demo account, fake money, to try my strategies and develop experience
But that doesn´t bring you money, right? So, what if it doesn´t work out....
And so on.
Sounds familiar? If not yet, prepare yourself for that!
To give you an advantage, I hereby gonna tell you about some of the FAQs I get when it comes to Trading and Investing. Here we go:
I beg to differ!
So you want to make it big in finance, get a bigger house, expensive cars, a boat, and be able to go anywhere you want to in the world?
But bear in mind that among those substantial investments out there sometimes fraud lies somewhere in-between.
The good thing is, it’s easy to tell serious investments apart from fraud if you pay attention to certain signs. Take for instance, when someone makes promises of financial rewards which you feel is too good to be true, go with your guts, ask questions and clarify things first before you commit to the scheme.
When someone promises significant financial rewards with minimal efforts on your part, that’s suspicious.
So also to make a statement and clear things also with SPM:
This site is no getting rich quick scheme, and no fake stuff. Also it´s no HYIP hype – MLM marketing and snowball system or Ponzi scheme!
What are you talking about?
.... stands for Hígh Yield Investment Programm and is usually something that get promoted with a fancy website stating you could make a few hundred percent win a month, mostly even with the hint that there is no risk involved.
Actually it´s mostly a pyramid scheme, where you have to bring new customers to get affiliate commission.
Don´t get my wrong!
Affiliate Marketing is good, if done legally and supportive without spam and supporting a real product that helps people solving a certain problem.
Anything else could be considered dubious.
... stands for Multi-Level-Marketing
Levels like plattforms in pyramids
Mostly a HYIP is a MLM, you get promotional commission when someone you referred also gets invested
Again, there are MLMs that are legally and make actual sense!
Think about goods that got sold through direct marketing, like when a sales person comes to your home, like in a sales party. Some cosmetics, kitchen goods and even vibrators got sold like this.
Maybe the most deceiving of the tricksters
It usually also includes a sort of pyramid scheme, but with the twist that the app. 3234% of your monthly income will partially reinvested in the system
The result is, that you can not take out all your "hard earned" money at once, means there is always some cash left in the pot
Well, as long as some guys on the top of the pyramid decided to take out a huge amount emptying the pot in the task. Than you can see this schemes disappear faster than they arose, and with them your invested money.
Why so serious?
You need to!
Trading does not require you to have hundreds of thousands of dollars or mount 48 screens in front of you, no
Technically, just one laptop is enough to get you started!
Although the bigger its size, the better for you, as it will enable you to analyze everything that’s happening in the market in greater detail.
You also need a fast internet connection, the knowledge, a broker, persistency, as well as the will to learn, invest, and succeed.
It is important, to begin with a demo account
Operating a demo account will enable you to learn how to use the trading platform and trading strategies free of charge. All trades on demo accounts are virtual and offer the same conditions as live accounts
Having gained experience of trading through operating the demo account and mastered the major trading strategies, you can then try trading on a live account
Keeping in mind that you are still a beginner, it is important to minimize your risks.
Remember too, that patience is a virtue that’s needed in every trade!
It is almost as important as your determination and quest for knowledge
- Bear in mind that so long as you do it right with a proven profitable strategy, the money will come.
Never give up, always try to push through even when the going gets complicated, and you feel like giving up. No quality knowledge can be gained within a short span of time
Always be willing to wait!
When you lose, which will happen at some point, do not let your emotions get the better of you. Because if you do, it will kick-start a downward spiral, which could cause you to lose more money than you would have if you had kept your mind to purpose.
Sometimes losses are inevitable even with the best trading strategies.
For How Long Will It Took?
In Comparison to Other Jobs or Craftsmanship?
It is important to think of the money making process as something you will learn both before and on the job
Think of it as something in the world of carpentry or mechanic
We just don´t work with wood or metall, but with money
You have to master every aspect of it for long enough to enable you to achieve more success
Individual pace differs, some learn faster than others, your ability and level of preparedness determines for how long you will have to learn.
You are your own measurement!
When money is involved, you are ready whenever YOU honestly feel you are.
Is Trading the Markets the Right Thing for Me?
This is a matter of attitude
If you don’t like making money or having a bad attitude towards making money, then you are probably on the wrong track....
Character development is highly essential in business as it is in keeping relationships with people
What you need is the determination to succeed
Hunger for success makes everything possible
Trading the markets could be right for anyone who wants to make money and has a positive attitude towards it!
How Important is Psychology in Trading?
When it comes to trading, psychology is of uttermost importance
Psychology refers to the way every trader perceives current trends in the financial markets and how this perception can be influenced by emotions and an individual’s susceptibility to different biases
As far as the financial world goes, the importance of psychology cannot be overemphasized and thats why I made the course "7 deadly sins of emotional trading"...
This one is for advanced traders tho. For those who already had their experiences with fear, anger, wrath and co at the markets
How Much Time Do I have to Invest?
Do I Have to Sit in Front of the Computer at All Times?
The difference lies in the terminologies
- Day Trading
- Swing Trading
Day traders buy and sell securities within the same trading day
It means ending all trades before the market closes.
Swing trading, on the other hand, is a style of trading that seeks to capture gains within more than one day but may last even weeks
Therefore, it´s also a matter of how much risk you wanna take, since a rate might have more volatiliaty, or movement, within days than in hours
Investing finally could last for years, it´s not only gaining money but also keep the existing one of value. People who invest in Stocks maybe don´t care too much about the movement of the stock but just enjoy participating on the divident payments
That’s for example done by putting money in conservative oriented ETFs or treasury Bonds.
No Advise, just information, ok!
So consequent upon this, the amount of time you have to invest depends on the trading method
If you do not have the time and willingness to sit in front of a screen all day, then it is advisable to do research over the weekend quietly or whenever you are free and then make a trading decision for the coming week based on your analysis.
Why Do Companies let their Stocks get traded on the Stock Market?
Companies sell their stocks on the stock exchange market so as to enable them to raise more capital from external sources
Businesses that want to raise more funds “go public”
A company’s first offering of shares is called an IPO (Initial Public Offering)
Once the company is public, it can decide to issue more stock. This allows them to raise more money to meet their business needs by selling parts of the ownership to members of the public
Such money can be used by the company to expand its business operations such as building a new factory or hiring additional employees to boost productivity.
This makes the business more profitable
Stock prices are influenced by demand and supply of the stock in question.
As a result, prices often change depending on how much demand there is for the stock at a particular point in time.
How do a price develop?
Lets see that on an example
Someone wants to buy a Dow Jones contract for 20.000, someone else wants to sell it for the same price. They agree, deal done, easiest possible transaction.
But what happens when someone wants to buy 10.000 contracts but just 500 are availible for a price of 20.000?
He can buy those 500 and another 200 for 20.001 points, than 300 for 20.005, 1200 for 20.010 and so on until he has all of his 10.000 contracts together, maybe buying the last 50 contracts for a rate of 20.050 points.
What happens in the process of buying is, that he increases the rate.
Someone is willing to pay more than before
A question of supply and demand.
The more you want, the more you have to pay for each single one