TRADING

Trading is the art of trading and / or speculating in financial markets in order to generate returns over time. Unlike an “investment”, trading is more short-term; Weeks, days, hours and even minutes. You can trade in currencies, commodities, stocks, futures, etc.

 

I learned that the only way to achieve something in this life is to work hard at it. It does not matter if you are a musician, writer, athlete or entrepreneur, there is no other way. If you do it, you will win, if you do not, no. Bruce Jenner

In recent weeks I have received many emails asking about “trading”, so I make a small interruption in this string of rules of the good speculator that I have been publishing to explain a little more about trading in financial markets.
Trading is the art of trading and / or speculating in financial markets in order to generate returns over time. Unlike an “investment”, trading is more short-term; Weeks, days, hours and even minutes. You can trade in currencies, commodities, stocks, futures, etc. Globalization and the development of technology have meant that now anyone can access trading and feel the adrenaline of trading in the financial markets.
But beware, clearly you know that to be an expert in any area requires practice and research, in trading the same thing happens. It is necessary that the person who is interested in trading evaluate their risks and their time to learn to know the most important trading principles.
Often in most courses or lectures we teach 2 principles to succeed in the market:
1-  Buy cheap and sell expensive
2-  Follow the trend
And honestly, this is not necessarily true. If you buy cheaply you are going against the trend, you are not following it. And if you follow the trend, what you do is buy expensive and sell more expensive. The moment we begin to eliminate these misconceptions and understand the real behavior of the market will be when we can succeed in our trading.
But what does this mean?
I tell you that I am a football and tennis fan, and as I like to read current affairs, I am also a sports blog reader, I currently read two in El País newspaper in Spain, coincidentally of two former Argentine footballers, Diego Latorre and Santiago Solari (it does not stop surprising me how this boy writes, an unusual quality). In his last article Diego Latorre, he launched a phrase that left me thinking for some minutes: “For the goal pass there is a perfect moment: the moment in which the thought of the passer and the runner that is offered to him collide. It takes a lot of sense of time, space and speed to give a goal pass. And more: it is necessary to master the effect and the force with which the ball is touched so that the receiver exploits the advantage. “Removing this phrase, I found a perfect analogy between that perfect moment in which the goal pass is launched (with the other added features) and the perfect moment in which a trading operation is performed.
pass iniesta.jpg

When you trade, you must learn to identify that unique moment in which everything converges so that you have a high probability of making money, but there will also be some characteristics that should be involved, such as risk management and the psychology of the trader. All this must be in tune and will bode that the odds are in your favor.
How do I identify the perfect moment?
When making an investment, identify the perfect moment is important but not essential, remember that in an investment, the maturation time can be years. As an investor, I have been with Google, Amazon and Disney for a couple of years (I have a predilection for foreign papers), and if the memory does not fail me, those purchases did not require a perfect synchronization of the moment and the market.
As a Trader -which is my specialty- I am an intraday trader , this means that my operations usually last a few hours on average. In trading itself it is essential to identify that perfect moment, that unique moment (the moment in which the thought of the passer and the runner that is offered to him collide), for this, I rely on reading patterns that dictate the price in some instruments in day to day, however, I can be days and even weeks without performing any operation, since only when the patterns that I know and I know have effectiveness do operations.
I tell you, this is not easy, first it requires experience and research to learn to know the price patterns, and then requires discipline, to be able to respect the trading plan properly without leaving the roadmap. Some people find this surprisingly natural, others (like me) find it difficult to learn and even tortuous, but as I said before, only perseverance makes the difference between those who remain on the road and those who achieve their goals.
Why would you be interested in trading?
Mainly because the profit potential is unlimited . Then, while in a business or company success or failure can be affected by others and by situations that are out of their control, in trading it is not like that, trading offers personal freedom, and if you become a good trader the possibilities can be endless. But attention, trading involves risk and if you are adverse to risk it is better to stay away from it.
Finally, a successful trader is someone realistic, know their skills and their limitations. He sees what happens in the market and has learned how to react, makes realistic plans and is consistent with his decisions. A professional trader has no illusions.