The secret to surviving stock trading in London 2022 is simple: buy low, sell high. This article looks at how your success rate could be massively improved by following a tried and tested six-step plan.
Get up early
Start before the other traders do. This could give you a considerable advantage over those just starting their day when you’re finishing yours. For example, if you were getting up at 6 am every morning while everyone else was getting up at 8 am, whenever there’s a large movement in a stocks price at 7 am, it could mean you get out of the trade before anyone else even knows.
Use all five senses to find bargains
Stock markets are driven by emotion, and fear is one of the most powerful emotions. When traders are fearful, they sell their shares for less than they’re worth, which presents an opportunity for you to buy them up cheaply. For example, right now, people are feeling very uncertain about what will happen with Brexit negotiations, so if you think there’s a chance that Brexit won’t happen, then this could be a great time to pick up some bargains.
Develop your plan based on your personality type
Some people have a natural flair for spotting trends early, while others are naturally good at seeing opportunities in the middle of bad news. If you know your strengths, it makes sense to develop a strategy that plays them up. For example, if trading binary options appeals to you more than trading stocks, create your plan based on that area.
Think outside the box
It can take months to get used to using the stock market software, so don’t let this hold you back from other ways of making money on the stock markets.
Keep an eye on companies that are having problems
If one of these is in your portfolio and they announce some news (positive or negative), this could send the price soaring (positive news) or plummeting (negative news).
Think carefully before deciding to use leveraged products
Think carefully before deciding to use leveraged products such as CFDs. These can be highly profitable but also lead to severe losses. Make sure that you only use them once you have thoroughly tested out how they work with smaller amounts of cash.
The future of stock trading in London
The other notable change is that many companies no longer list on stock exchanges – instead, they exist only in digital form and trade over encrypted networks outside of regulatory control. These dark pools have caused issues for law enforcement agencies, which can’t track individual transactions easily because records have not been created.
In another twist, several companies have launched their IPOs on crypto-currency exchanges, offering a more comprehensive range of investment opportunities. The low barriers to entry mean that these companies can grow far faster than those listed on stock exchanges, so they have been quickly gaining market share. One Chinese company, Baidu, now has over six times the revenue of Apple and is only one year behind them in valuation.
As well as trading stocks outside traditional markets, this new system has enabled people worldwide to offer up their savings for others to invest. This alternative economy is known as ‘p2p finance’, and many experts estimate it could be more significant than all current crypto-currencies combined within the next five years. As this new economy takes hold, many governments are looking to tax it and stop others from using it for illicit purposes.
As more people migrate onto these markets, traditional stock exchanges will lose their place as the leading platform for shares of large companies. However, there will always be a demand for high volumes of low-value transactions (such as those that trade on Forex), and so they won’t disappear entirely anytime soon. Before investing real money, new traders should use a reputable online broker such as Saxo capital markets.