To start making money on trading, first of all, you need to select assets, the price change of which will be predicted. And for novice traders it often becomes a difficult and lengthy process. And mistakes made entail losses instead of profits.
What is considered an asset
Assets are also instruments. They are divided into several main groups:
- currency pairs
- raw materials, metals, other goods
Most brokers provide access to assets of all categories, but this is not always the case. Some are specialized in something.
The best, optimal, most profitable assets for all traders at the same time do not exist. The choice depends on a particular person with his level of training, knowledge base, previous experience, temperament and character.
It is desirable for a trader to know a specific segment of the market, factors affecting the formation of the price of a certain instrument. Then the forecasts will be more accurate and generate more profits than losses.
The exchange rate is influenced by the state of the country's economy as a whole, political events within it and concerning it, the policies pursued by the Central Banks, statements by the leaders of the state.
The value of shares of companies changes when reports are released for certain periods, news about profits, changes in the structure of production, buying, selling or merging with competitors. The general situation in the field to which the company belongs also affects.
Indices combine the indicators of a group of companies collected according to some common criteria, for example, related to the same production area. So, if the dynamics in the energy sector as a whole is positive, then the index of energy companies will go up.
Prices for metals, raw materials, agricultural crops depend, first of all, on the ratio of supply and demand for them, on the volume of production, yield, etc.
How to make the right choice
The trading platforms of most brokers allow you to buy hundreds of types of assets. The names of some of them are familiar to everyone, others are known only to a narrow circle of specialists. Beginners sometimes have their eyes wide.
Diffusion of forces can be a big mistake in such a situation. An attempt to make money on everything at the same time immediately turns out that there are not enough resources in any direction for proper analysis. Transactions are made without a quality forecast. Losses are not long in coming.
It is better to focus on something specific, study the selected instrument, news and forecasts for it, pricing rules and other information.
The easiest way is to make predictions for the most popular instruments. These include, first of all, the names of the commodity market - oil, gold, silver. After all, it is on them in the open access that you can find a huge amount of analytical information. It will be ten times more than, for example, the New Zealand currency.
Accordingly, it is easier to make a forecast for price changes even for a novice trader.