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Which securities should I trade?This course was geared towards trading stocks but you need to know what other securities are available to trade. One vehicle is not better than another one except from your own perspective. Otherwise, everybody would be trading the same thing! What you need to do is get comfortable trading one type of securities and concentrate on it. Once you have mastered trading one you can start looking into other ones so that you may diversify your trading approach. You also need to realize that what you will learn here will be applicable to all the other vehicles as well because it is all based on their specific stock's chart. I personally recommend you start with common stocks since it is the easiest to understand but you will find that it is likely the most difficult option to make big returns with. The reason is that you are not very leveraged so you need to invest large sums of money to make large sums of money… With the other securities you don’t need a lot of cash because you don’t need to buy the stock themselves. You buy contracts which if exercised would force you to cough up large amounts of money but as you can imagine, people almost never exercise their rights. Basically, they just trade the contracts. I’ll go in more details later but for now all you need to know is that with stocks, if you don’t use your margin, you buy 1$ of stock with 1$ of your money. With a margin you can go as high as 5:1 but likely not higher than 3:1. With Futures for example, you can be as leveraged as 30:1 and options have similar leverage opportunities. Of course the risk level is higher when you are that leveraged and you can lose it much faster. That’s why you need to get comfortable trading stocks first before you start playing with more performant securities because you will use what you learn trading stocks to determine your entries and exits… Every race car drivers learned to drive in a “normal” car before they jumped in race cars! The same logic applies here… Now, just go ahead and click on the securities listed on the left to get more information about all of them |
