Page 10 - Trading #101 Course – Part One: Trading Basics

TRADING #101 COURSE – PART ONE: TRADING BASICS /2017-10-06

Six Items to Consider Prior To Choosing A

Market

1. Dollar size of your trading account. Some markets may be too expensive for you
to even consider trading. You may not be able to afford the market, or you cannot trade
it and still maintain effective risk control. Sometimes by choosing a lower time frame,
you can still maintain effective risk control.

2. Amount of time you have available to monitor the markets. Different trading
styles require different time obligations. If you day trade, then you need to be available
to watch and monitor your trading all day during market hours. However, if you are
position trading, then you only need to monitor the markets in the evening. Position
trading is great for people who work during the day.

3. The time frame you want to use. If you are a day trader, you will choose an intraday
time frame to trade such as 1-minute, 5-minute, etc.; if you are a position trader, you will
choose a daily time frame; and if you are an investor or long-term trader, you will
choose weekly and monthly time frames. Choosing the best time frame is a combination
of your trading account size, your risk control approach, and your personal preferences.

4. Your overall knowledge of the markets. As you gain experience and knowledge
about the financial markets, you will expand your trading and investing possibilities. For
example, most novice students start out with the stock market, but as they learn about
other markets, such as options and futures, they may branch out to new areas.

5. Your trading and investing skill level. Don’t confuse this with your overall market
knowledge. This topic deals specifically with your trading and investing ability. Some
markets require a higher level of skill due to their higher level of volatility or movement.
You need to work with markets with which your skill level is compatible.

6. Your personal preference. Simply stated, what markets do you like best? Some
students who are farmers may focus their trading on the commodities markets, such as
the grain markets, while others on Wall Street may want to focus their trading and
investing on the stock market.

Table of Markets

The information in this section is subject to change at any time and is for educational
purposes only. Check with your commodities broker for current commodity
specifications before trading.

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