This is an important question that every trader has to answer - which instrument suits her/his trading style best... Where she or he can profit markets most?
Fortunately there are not so many possible options: currencies, bonds, derivatives, equities etc.
Normally, derivatives (like options, swaptions etc) are quite advance instruments when it comes to pricing and trading - beginers and intermediate traders shall not base their strategies on derivatives.
Bonds require very detailed knowledge of monetary economics. If you want to trade bonds (or other FI products) successfully, you need to track FEDs or ECBs policy very carefully. This is not as simple as it may seem. Additionally, not so many trading platforms offer good products for those who want to trade bonds.
After excluding complex derivatives and bonds you are left with stocks and currencies. The decision which instrument to chose should depend on your attitude to trading. If you like tracking hundreds of companies at the same time, and you want to base your investment strategies on fundamentals - stocks should be your prime choice. On the other hand if you prefer technical analysis and you rather want to focus on the price dynamics currency trading is what you should chose.
Fortunately there are not so many possible options: currencies, bonds, derivatives, equities etc.
Normally, derivatives (like options, swaptions etc) are quite advance instruments when it comes to pricing and trading - beginers and intermediate traders shall not base their strategies on derivatives.
Bonds require very detailed knowledge of monetary economics. If you want to trade bonds (or other FI products) successfully, you need to track FEDs or ECBs policy very carefully. This is not as simple as it may seem. Additionally, not so many trading platforms offer good products for those who want to trade bonds.
After excluding complex derivatives and bonds you are left with stocks and currencies. The decision which instrument to chose should depend on your attitude to trading. If you like tracking hundreds of companies at the same time, and you want to base your investment strategies on fundamentals - stocks should be your prime choice. On the other hand if you prefer technical analysis and you rather want to focus on the price dynamics currency trading is what you should chose.
4 komentarze:
hi there. came accross your blog while searching for an investment blog by a fellow singaporean :O)
i agree with your analysis, and also prefer forex, especially now since stocks have been experiencing more regular majo corrections recently. i hope they are just corrections :O)
anyway, hope we can keep in touch. btw, do you have a mailing list that i can join?
regards, ck
Not yet :) Just come around sometimes and you will see updated post.
Or you can sign up for RSS.
Best,
S.
Agreed, currencies tend to be better for technical traders. But what about commodities? Where do you feel they stand?
I don't have too much experiance with commodities, but I beleive they have more in common with currencies than with equities (so these instruments are good for technical traders)
Best.
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