Different Types of Trading

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Old Nov 1, 2017, 8:21pm   #1
Joined Sep 2017
Different Types of Trading

Hello folks!

I don't believe it's good enough to have a general idea when it comes to trading, so for that reason I feel I should make every effort to understand this fully.

How many different types of trading is there?
Is it just Stocks and Derivatives over all and then one could further breakdown derivatives to forex, commodities etc...

I'd really appreciate it if someone could help me break this down.
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Old Nov 2, 2017, 3:03pm   #2
 
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Originally Posted by Nowler View Post
Hello folks!

I don't believe it's good enough to have a general idea when it comes to trading, so for that reason I feel I should make every effort to understand this fully.

How many different types of trading is there?
Is it just Stocks and Derivatives over all and then one could further breakdown derivatives to forex, commodities etc...

I'd really appreciate it if someone could help me break this down.
No break down from me, I am not a trading scholar :-), but here is my take on what I do and don't trade and why... I trade something that is not very complicated, will not expire in the future, no need for leverage, so pretty much I am left with stocks only, and I don't trade ETFs (few exceptions) and especially no leverage ETFs...

The US stock market consists of few thousand companies, so the chances are I'll have something to trade few times a week - the average for me is a 1 trade every two days or approx 2 trades a week...
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"If you don't find a way to make money while you sleep, you will work until you die." Warren Buffett, CEO of Berkshire Hathaway.

My number 1 trading rule: EDUCATE YOURSELF!

Before you trade even single penny on the stock market, please spend the time and educate yourself by back testing different trading strategies and ideas - go to eBay and search for "historical stock market data", you can buy 20 years of data for less than $100 - that's all you need to start.
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Old Nov 2, 2017, 6:45pm   #3
NVP
 
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Originally Posted by Nowler View Post
Hello folks!

I don't believe it's good enough to have a general idea when it comes to trading, so for that reason I feel I should make every effort to understand this fully.

How many different types of trading is there?
Is it just Stocks and Derivatives over all and then one could further breakdown derivatives to forex, commodities etc...

I'd really appreciate it if someone could help me break this down.
2 types of trading :-

Winning trading
Losing trading

try to get into the 1st group eventually ......

N
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Old Nov 2, 2017, 9:35pm   #4
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Nowler started this thread Are Futures and Derivatives just synonyms for the same thing?

So in trading, you can trade the stock, as in you own the stock or you can trade futures/derivatives which is basically speculation on whatever instrument...?
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Old Nov 3, 2017, 12:53am   #5
FXX
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Originally Posted by Nowler View Post
Are Futures and Derivatives just synonyms for the same thing?

So in trading, you can trade the stock, as in you own the stock or you can trade futures/derivatives which is basically speculation on whatever instrument...?
Futures

Two parties agree in a futures contract to buy a tangible or intangible product or asset at a specified price and on a specified future date. The traded asset is called the underlying and may be a commodity, currency, interest rate, stock market index or catastrophic insurance loss. The trade date is called the settlement or maturity date. The agreed price is called the futures price. Both parties are obligated to carry out the contract.

Derivatives

Derivatives are contracts whose value derives from something else. It can be the variation over time of a commodity price, exchange rate, stock market index or bank deposit. It also could be the variation of a commodity price against a stock market index. Technically speaking, a futures contract is a derivative. An option is a derivative contract where a seller offers a buyer the right, but not an obligation as in the case of futures, to buy an asset. They specify both the price, the strike price and the date, the exercise date, of the transaction. A swap is a derivative contract where two parties exchange cash flows, such as interest rate payments. The interest rate calculations are agreed and the two sides are obligated to the deal. There are also combinations of swaps and options called "swaptions."
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Old Nov 3, 2017, 1:14am   #6
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Nowler started this thread
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Futures

Two parties agree in a futures contract to buy a tangible or intangible product or asset at a specified price and on a specified future date. The traded asset is called the underlying and may be a commodity, currency, interest rate, stock market index or catastrophic insurance loss. The trade date is called the settlement or maturity date. The agreed price is called the futures price. Both parties are obligated to carry out the contract.

Derivatives

Derivatives are contracts whose value derives from something else. It can be the variation over time of a commodity price, exchange rate, stock market index or bank deposit. It also could be the variation of a commodity price against a stock market index. Technically speaking, a futures contract is a derivative. An option is a derivative contract where a seller offers a buyer the right, but not an obligation as in the case of futures, to buy an asset. They specify both the price, the strike price and the date, the exercise date, of the transaction. A swap is a derivative contract where two parties exchange cash flows, such as interest rate payments. The interest rate calculations are agreed and the two sides are obligated to the deal. There are also combinations of swaps and options called "swaptions."
So what am I trading?
Haha, this is silly that I had to ask that at this stage but I have just adapted to the second type of trading I came across. I tried options for a week and lost €70 so I really know anything other than what ive been doing...

All i know is I trade forex and oil with Oanda and im aloud to bet money that a particular move in price is going to happen. I can either manually manage the duration of the trade or I can set take profit targets and stop losses. I can get out of the trade any time I want...

Im beginning to wonder how much different working in a futures prop firm would differ to how I trade now.
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Old Nov 3, 2017, 1:58am   #7
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So what am I trading?
Haha, this is silly that I had to ask that at this stage but I have just adapted to the second type of trading I came across. I tried options for a week and lost €70 so I really know anything other than what ive been doing...

All i know is I trade forex and oil with Oanda and im aloud to bet money that a particular move in price is going to happen. I can either manually manage the duration of the trade or I can set take profit targets and stop losses. I can get out of the trade any time I want...

Im beginning to wonder how much different working in a futures prop firm would differ to how I trade now.
Slow down. Spend some time reading about all the different instruments you can trade and the markets traded. Then choose the one you like most and stick with it.

There are plenty of opportunities in all markets so don't worry about missing out. The information that will make you money lies in understanding the drivers of your market. Think of it as a rigged boxing match where you match the weakest against the strongest.
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Old Nov 3, 2017, 2:41am   #8
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Nowler started this thread
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Originally Posted by FXX View Post
Slow down. Spend some time reading about all the different instruments you can trade and the markets traded. Then choose the one you like most and stick with it.

There are plenty of opportunities in all markets so don't worry about missing out. The information that will make you money lies in understanding the drivers of your market. Think of it as a rigged boxing match where you match the weakest against the strongest.
I'm not worried about missing any opportunities in the market.
I just want to know more about what I am and what I could be doing.

If I get an interview with this crowd I applied to i'd like to have some idea of what's going on and what futures are about. Knowing how that differs to what I am doing now is integral to being able to discuss how I can be of use to them. How can I highlight my decent potential via my current trading results (stopping the hemorrhaging of money) and then convert that into how I could apply it with them in the futures? I dont even know if I am trading futures or not.

I like being able to plan ahead.
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