With the internet providing exposure to so many aspects of trading, and trainers on hand for every different type of trading style, it would be safe to think that you have everything covered.
But you don’t.
Here are 4 sneaky little things that you won’t find in any trading course that will come in very handy when it comes to the business of trading.
Which strategy / trainer to use
There are a million different strategies, and so many incredible claims that it is hard to determine which ones are legitimate. Each trainer or strategy is based on a particular trading philosophy and methodology and it can be difficult for a new trader to understand which will work, and more importantly, which will work best for you with your trading philosophy and skills.
The easiest way to find out about their results is to ask for proof. Sometimes this can be falsified, so you need to get independent third party verified information (like from myfxbook.com). Do not accept unverified or short term trading information. If they have not been around long enough for longer term information, wait until they have.
In fact, waiting is probably the best method to determine which strategy fits in with your trading philosophy and style. It is easy to be attracted to a particular methodology when you don’t have much information to work with. You need to talk to more trainers and hear about their different methodologies and philosophy. The information gathering process will help you understand what is available and help you understand which is best for you.
Do not be lured in by the promise of great returns. Unusually high returns (over 3-4% per month) should be treated with caution. In any case, any good system will create really good returns, so there is no need to abandon what you believe will work for you.
Which broker to select is usually easy if you are part of a formal training course, because the trainer will likely have an affiliate agreement with a brokerage. This means that they will have a vested interest in sending you there, which might not align with your needs.
Finding the right broker requires proper due diligence, which can be challenging. You need to ensure that they broker is properly regulated by the right regulators for you, and that your funds will be well protected. You need to try their trading platform and test the execution speed and reliability. You need to understand the hidden costs and understand their rules.
The best way to achieve this is to trial their brokerage with a small amount of funds. It is probably best to avoid recommendations on social forums, as you will tend to find that this method is not particularly reliable. If you know someone independent that has a broker recommendation, this is usually a good solution, after doing proper due diligence.
Negotiating the trading conditions
There is a lot of competition, and none of the conditions are set in stone. If you want something better, ask. If they value you and circumstances permit it, they will provide you with what you’re asking.
Brokerage terms and conditions
A brokerage will advertise no spreads, and then charge excessive overnight rates. It will charge you a weekend overnight rate on Wednesday at 4pm in your time zone because it is midnight where they are located, so your position opened from 3.30pm to 4.30 pm will have 3 days of swaps for a 1 hour position. You had a full hedge but the market widened and you got a margin call….. These things happen and you need to know about them before you start trading.