A large part of becoming a successful investor is about finding the type of trading that works for you. If you read through most guides for beginners, however, they focus only on the more common or more fashionable approaches and don’t really tell you much about what your options are. This article looks at alternative ways of trading and investing your money. There’s no one-size-fits-all solution in this business and alternative approaches, even if they’re not widely used, might actually be the best fit for you.
When you start trading you may feel that it’s you against the world, with everybody else as a competitor. The problem with this is that, quite simply, the world is big. No one person can manage enough information at once to take it on alone, and if you are to be successful in this way, you’ll need a lot of luck. In fact, most really successful investors achieve their aims by using cooperative strategies. Because there’s so much to play for, you can afford to make some money for other people as well as yourself, and you may find that this approach helps you to make a lot more money overall.
The key feature of social trading is that it enables you to keep track of much more of what’s happening across the markets, simply because you’re sharing your expertise and the burden of research. Some social trading networks also pool funds. Joining the right network can put you in a similar position to having a professional investment manager, without the cost.
If you want somebody in your trading network to make decisions on behalf of the group or if you want to adopt the same strategy as another investor, with a similar amount of capital, whose success you admire, you could choose to engage in copy trading. This is a system whereby you automatically trade in the same way as somebody else. It usually involves paying a set fee to the trader you want to copy in exchange for full information about the trades being made (a fee you’ll still be liable for even if the trades work out badly). It can be a great choice for investors who want to make sure they don’t miss out on opportunities when they can’t be present at their trading stations all the time, or for those who want to watch and learn before starting to make their own adjustments.
Copy trading can involve a range of different assets but many inexperienced investors particularly favour the opportunity to copy professional forex trades as a way of adjusting to a complex market. It’s also a good way to get to know markets in unfamiliar
geographical regions. Copy trading differs from mirror trading in that it links a specific portion of your funds directly to the account of the trader you’re copying.
Alternative asset classes
If alternative approaches to the assets you know well don’t give you the edge you’re looking for, it might be time to try your skills in a different area. Commodities, for instance, tends to be low down the list for new traders to try, but if you have some knowledge of the particular commodities in which you intend to trade – picked up, perhaps, from a previous job – then it can be very lucrative. Furthermore, because commodities underscore the stock market, trading in this area can help you to make accurate predictions if you’re also trading in stocks.
Because many tradable assets have no concrete form, many people forget that it’s also possible to invest in property, from the home you live in to other buildings which you rent out, possibly after refurbishment, for residential or commercial purposes. You can do this locally, in markets you know well, or you can explore opportunities elsewhere – perhaps even overseas. Though you should always visit and get to know an area before buying property there, because there are scams in this area, smart global property investing – alone or as part of a group – can make your money go a long way. It’s a particularly good investment strategy for people whose aim is not so much to make money immediately as to create a substantial fund for later life.
Exploring alternative means of investing could help you to do a lot more with your money and earn serious returns rather than leaving it in a savings account where it can barely keep up with inflation. When you find the right approach, you’ll be able to lower your risks and gradually increase your gains, giving yourself a brighter future to look forward to.