Modern technology makes it easier than ever before to trade. You can buy and sell a huge variety of different goods and commodities online from your home, office or wherever you happen to be.
The convenience that this offers leads to the question of which trading market would suit you best. By looking at what each of the most popular methods involves we can more fully understand the advantages and disadvantages of them.
Playing the Stock Market
Stock market trading has been around since the Dutch East India Co. produced the very first paper shares at the start of the 17th century. Things have changed dramatically since then, with online trading, research and analysis allowing newcomers to get started easily. Of course, stock market trading has traditionally been viewed as a risky, highly volatile way of investing money.
Tales of huge price drops and market crashes can make it seem like the sort of investment that only the brave or the foolish would attempt. On the other hand, there is the prospect of massive profits due to days such as October 14, 2008 when the Dow Industrial Market had a 936 point gain.
Overall, the risks levels really depend upon the type of stock that you choose to invest in. If you value stability and steady growth over the prospect of huge gains then you could opt for stocks generally regarded as being safe, such as Coca-Cola, UPS, and Boeing. If you want the chance of making a fortune, then penny stocks are cheap and may be heavily under-valued.
Round the Clock Forex Trading
Do you want something that offers the chance of even greater returns than stocks? Forex trading is the biggest market on the planet right now. With forex trading, investments gain or lose based on how one currency performs against the other that it is paired with.
Foreign currencies have been traded ever since they were first created, although the appearance of the gold standard in the 19th century was an important milestone for this market. By going online, you can carry out forex trading on dozens of currency pairs around the clock from your desktop or mobile device.
There is no doubt that forex trading carries some risks. A few poor moves can cost you a lot of money in this volatile market, especially in leveraged products. However, the chance for huge profits is what makes this type of investment particularly tempting for some investors.
The Volatile World of Cryptocurrencies
The spectacular rise of virtual currencies such as Bitcoin has encouraged many investors to start trading them. Bitcoin started out as virtually worthless when it was first produced in 2009. It then rose to an all-time high of $17,900 in December 2017 before falling to around $6,300 at the time of writing.
Bitcoin is far from the only currency of this type that can be bought and sold right now. Others include Ripple, Dash, Litecoin, Ether, and many more. With new coins being issued on a regular basis, the choice becomes wider all the time.
The big factor to take into account here is the uncertainty over the future value of these coins. For instance, while some analysts believe that Bitcoin could reach $12,000 again soon, others believe it will keep falling. Bitcoin has even been called “worthless” by Allianz Global Investors and JPMorgan CEO Jamie Dimon.
While these methods of trading may sound similar at first, it is clear that they are all very different from each other. The level of risk and potential profits are among the issues that you need to take into account when deciding which one to invest in.