Could you extend your online trading skills to other areas?

We will look back in years to come and maybe more appreciate how the Internet has changed investment markets. While online trading tends to focus on stocks and shares, you may be able to transfer your skills across a whole range of online markets. There are many to consider, such as:-

 

Stock trading

 

Online trading now covers everything from day traders to long-term pension investments and everything else in between. It is now possible to trade literary 24/7, as when one market closes, another will open in a different time zone. While it is essential to focus on your strengths, the options are endless for many skilled day traders.

 

Forex trading

 

This area of the market was historically the domain of professional traders, companies, large hedge funds and huge financial institutions. However, it is now possible to speculate on different currencies and with the recent volatility in currencies and interest rates; there has been a lot of action.

 

Cryptocurrency trading

 

Over the last decade, interest in cryptocurrency has hit the main market. Seen by many as a form of "anti-establishment" currency/investment, it was initially discounted and dismissed by many. However, interest has grown, and despite the attempts of many regulators, in the US in particular, trading numbers have increased significantly.

 

Options trading

 

When the pit system was in operation, who would have thought the online trading arena would take in options? This lightning-fast marketplace was the exclusive home of professional investors, hedge funds and colossal investment companies. It is now available to the masses, and online trading numbers have increased significantly, but due to the degree of leverage, it is seen as high risk/potentially high return.

 

While basically consisting of basic calls and puts, there are dozens of different ways they can be sliced and diced, used together to create an array of different positions.

 

Futures trading

 

Online trading in futures allows you to monitor out-of-hours movements on major stock markets worldwide. Whether these movements are always accurate on the open is debatable, but it gives you an idea of investor sentiment outside regular trading hours. While commodities and financial indices are the main thrust of the online futures market, you can buy/sell a vast array of different assets; you will be surprised!

 

Contracts for difference trading

 

Contracts for difference (also known as CFDs) are seen by many as a type of option trading. Derivative contracts allow you to speculate on the price movements of various assets without actually owning them. Using stop-loss limits with contracts for difference is essential because leverage means your position can change quickly. Sometimes too quickly!

 

Commodities trading

 

The online trading community is active in commodities such as oil, gold and various agricultural products. While speculators are often frowned upon in this particular market, because of the direct impact on the cost of living, it is essential to recognise the liquidity they bring to this area. Commodities options are often used as a means of hedging against future price movements so that a business can plan ahead with a degree of confidence.

 

Similar concept, different assets, plus leverage

 

If you look at the online trading opportunities above, they revolve around different types of investment instruments and, in many cases, different types of assets. The concept is the same; running your winners, cutting your losers and using stop-loss limits, but leverage can significantly impact trading results.

 

Summary

 

In theory, many of the skills gathered as a stock day trader can be transferred to other areas of the online trading market. You may need to adapt your strategies slightly, time spans and appreciation of the risk/reward ratio, but there may be other opportunities and other markets to consider as an online trader.

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