Financial markets are very different. They all offer opportunities, but with very different characteristics.
The stock market shines with thousands of investment and trading candidates. Stocks are securities and that means that they can’t go below zero. For the disciplined trader this is sort of a built-in money management. For the investor it may be the long way into oblivion. If you are on that way, start thinking about becoming a trader…
Contrary to stocks the Forex markets are based on contracts. Be cautious! What you pay into the account is the margin and not your ante. And then, Forex is often driven by random. Hard to believe if you look at charts, but nonetheless true.
Perhaps even worse is the futures market with its highly anticyclical behavior that at times converts itself to cyclical trending characteristics. This sort of market likes to shake out traders, because most of them are either to one or the other direction inclined.
Finally we have the options markets and they top everything. Unfortunately they are centered around the double-edged sword, the leverage. You could make a fortune if you were knowing the secret to turn the leverage to your advantage, but mostly you will just lose. There is not only the devaluation of the time value that makes options trading difficult. It is more — see the article above.
Interested in the secret to exploit the leverage? On one hand it is simple, but on the other…
So, you will have to learn about the right way or the nearly perfect way to trade the momentum and then apply that to underlyings with options. If you enter the right thing at the right time, you will overcome the math of the cruel options market.
