The 4 Aspects of trading

Trading is a modern form of Investing in which people can access different financial instruments from
different financial markets around the World by using the comfort of their phone or computer/laptop.
There are wrong ways of doing trading and a correct way. For trading to give you a consistent source of
income, which you can rely on, you need to approach it as your own personal online investment
business. Like in any business, there are essential elements on which you need to concentrate, work, and
improve in order for the business to start working for you. In trading we can divide the important things
in 4 groups, we call them the 4 Aspects of trading.

1.) Trading analysis – The first aspect of trading is the trading analysis. There are different ways to
make analysis and the better you become at them, the more successful and accurate predictions
you can make. There is one very important thing that every trader/investor needs to understand
from the very beginning – no matter how good you are in making analysis, there is NO way to
make 100% accurate predictions. No one can do it, not even the most successful Investors in the
world. The reason for that is that there is a dose of unpredictability on the market – such as
surprising fundamental events or big trading activity. Getting good in analysis and having good
information is still very important but the lesson here is that in order for you to achieve good
level of success, you need to use and improve in the other 3 Aspects as well.

2.) Trading strategies – Trading strategies are different approaches and ways in which you combine
different positions to get specific benefits. There are strategies that can help you to increase the
size of your profits, make more consistent profits, reduce the risk, increase the potential profit
when the price goes against you or is already in your favour, ensure a profit that you are already
making or even cover for trades that are on big negative. The market will be giving you surprises
– positive and negative ones. The strategies give you general approaches and situational
approaches that you can use depending on what the market creates for you. There are 5
essential strategies that a good trader needs to know, and we will discuss them as we go ahead.

3.) Risk management – As in any other investment, in trading, money can be made, and money can
be lost. Understanding and using proper risk management will help you to reduce the negative
trades and give you approaches and solutions for any kind of negative trade you can get. It is not
possible to trade without trades going against you, but it is possible to turn every negative trade
into a profit or at least a break even.

4.) Trading capital – The size of the capital matters in any Investment. The more you Invest, the
more you can make, it’s simple. In trading the first 3 aspects are the knowledge and personal
skills that a trader needs to acquire but the 4 th aspect, capital, is the one that will determine how
much of what you know, you can put into use. You can conclude that in trading, the size of the
capital not only determines the profiting potential but also the approaches you can use and from
there – the success ratio.