Top tips for getting an edge on your investments

 

If you’re a trader or an investor with a financial interest in one of the many speculative financial markets out there, you’ll already be aware that getting ahead of the game is key. The investment markets are complex to say the least, and relying on luck simply won’t cut it. By following the top tips outlined here, you can start to get a handle on how to navigate your way through this complicated market in a sensible and forward-thinking way. From analyzing data from years gone by to training yourself to take rational decisions, there are plenty of ways in which your investment career can get that all-important edge.

Historic data

Going into the trading world is something that ideally only those with a head for numbers, statistics and information analysis should do. That’s because one of the smartest ways in which to get ahead of the curve in the stock, Forex, commodity and other speculative markets is to analyze how they performed in the past – and learn what might make them tick in the present.

While it’s important to remember that how a market behaved in the past is nowhere near a reliable enough indicator of how it is likely to behave in the future, it’s still worth looking at past data. It can show very clearly, for example, what events have been known to trigger a market movement, which you can then use to inform your decisions.

Wading through historic data is something that can be somewhat time consuming, though. Luckily, there are tools that can do this for you. Platforms like MetaTrader can take historic data for a particular market and analyze them, and you can stipulate what analytical format – or “indicator” – the software should take, depending on your particular requirements and what you want to find out. A crossover indicator, for example, can suggest when a market movement is about to begin going the other way, while a Fibonacci retracement can help you work out where those vital support and resistance levels may be.

Analysis of the markets

However, it’s also important to stay ahead of the curve when it comes to what’s happening in the present day. All sorts of events can affect the investment markets, and if you’re not prepared, then you can easily miss them. In the Forex markets, for example, the release of economic data sets like gross domestic product figures can transform a market’s performance, so you need to be clued in to what’s happening in order to make sensible investment choices. Signing up for a service that provides a four times daily analysis of global trade is a sensible move, and make sure to read a variety of information published online by major financial news sites.

Use the tools

Many modern investment platforms come with a wide range of tools designed to help traders optimize their decisions and place trades in efficient and speedy ways. One such tool, for example, is the stop loss order. It allows you to state at what level of loss you want to close your position and then have the system close it for you if that point is reached. Whatever exact functionality you need, though, there is usually a method that can help you save time and enjoy a convenient trading experience.

Reason, not emotion

Another advantage of the order execution tools outlined above is that they take away the temptation to get too emotionally invested in the trading process. Sometimes, a trader who has an edge over the market will be too scared to lose it, and they’ll start checking their trades all day and closing them in moments of panic. Rational traders who is able to accept that some losses are acceptable as part of an overall winning trend, though, will be able to set their stop loss as a safety measure and then leave the trade to run its course. In the long run, the latter type of trader will always have the edge.

Entering the investment markets isn’t something that’s right for everyone. As this article has pointed out, there’s a lot of hard work to do here, ranging from regular market analysis to comprehending the tools on offer and how to use them. But if you do decide to enter, it’s definitely worth your while to optimize your trading strategies and outlook to give yourself the best possible chance of success. By thinking rationally, selecting handy indicators and services and immersing yourself in historical data, you can ensure you put your best foot forward when it comes to placing and closing your trades.

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