In the world of investments, trading futures and stocks occupies one of the central places. These financial instruments provide an opportunity not only to preserve capital, but also to increase it. However, before you start trading, it is important to understand the basics of the process and understand which indicators can help you make the right decisions.
What are futures and stocks?
Futures are contracts that oblige you to buy or sell a certain asset (for example, oil, gold or agricultural products) in the future at a pre-agreed price. They are actively used for hedging risks and speculation.
Stocks, in turn, represent shares in a company. By purchasing shares, you become a co-owner of the business and can receive dividends depending on the company's profits.
The trading process
1. Opening a brokerage account: The first step is to choose a reliable broker. Brokers offer access to trading platforms where you can trade stocks and futures.
2. Market analysis: Before buying, it is important to conduct market analysis. This can be fundamental analysis (assessing the financial performance of companies) or technical analysis (studying price charts).
3. Choosing a strategy: The trading strategy depends on your goals - be it short-term speculation or long-term investment.
4. Using indicators: Indicators help traders make informed decisions. Let's look at two popular indicators:
- SMA (Simple Moving Average): Simple Moving Average shows the average price of an asset over a selected period of time. It helps determine the direction of the trend.
- RSI (Relative Strength Index): Relative Strength Index measures the speed and change of price movements. RSI above 70 may signal that the asset is overbought, and below 30 - oversold.
Many experienced traders use indicators in their trading, for example
Alexey Kirienko
5. Making trades: After analyzing the market and choosing a strategy, you can start trading. It is important to remember the risks and not to invest more than you are willing to lose.
6. Monitoring your positions: The market can change quickly, so regularly monitoring your positions is the key to successful trading.
Trading futures and stocks is an exciting process with many opportunities to earn money. However, it requires careful study of the market and a balanced approach to decision-making. Using indicators such as SMA and RSI can greatly facilitate this process and increase your chances of success in the world of financial markets.
Start small, learn from the experience of professionals and do not forget to manage risks - these are the main rules of a successful trader!