Safest way to trade?

zaysev36 said:
What you and some of the others posters propose is a nice and truly safe way, but to do so you'd need some special permits or something. What I had in mind with this questions is some kind of instruments or strategies that are available to any trader.
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Well, you just need to talk your way into a prop shop and/or trading arcade. In those situations, I believe it is not necessary to be certified by the appropriate regulatory body. Regulation only comes into play when you are out there advertising for investment funds.

I think the answer you are looking for - something that is basically no risk but still earns you money, doesn't really exist. Even with strategies that have a really high edge (whether it's in trading, poker or any normal business) still requires you to take some calculated risks.

Not sure whether that makes sense (or whether you like the answers that you are getting here). :|
 
options-george said:
Not sure whether that makes sense (or whether you like the answers that you are getting here). :|
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From those answers it seems clear to me that I just can't word my question correctly :confused: I'm not afraid of risk, nor do I refuse to accept them. But the point of this thread was to find out the way to minimize risks as much as possible, while still continuing trading and making some profits (scanty, I believe, but still). Some specific strategies, i.e. hedging.
 
Get a second job, or a night job stacking supermarket shelves is quite a good hedge against a small portion of losses in "trading".

The reason trading is in quotes is because the real party doing trading is the entity who is selling you the asset or a proxy of it and then buying it back from you cheaper. The same analogy I used else where is buying some items from Walmart and then try selling them for a profit. In that transaction, the trader is Walmart and not you. This arrangement applies in all markets from your perspective.

If you feel you have no chance for profit in a transaction with Walmart, then you are unlikely to have a chance in other markets. They all run their business to make a profit. That means they are there to take your money and not to give you their money.

Is it possible to beat Walmart ? Yes, if you work out how much they are buying their goods for, you can find ways to buy cheaper. Then you stand a good chance of beating them. To come up with ways to do that will take years of practice and study. I am quite sure you can afford neither the time nor the effort, as nearly everyone coming to these forums need a quicker way.
 
You can't trade without risk.

The boffins at Long Term Capital Management thought they could do that and look where that ended.

The problem with minimizing risk is that you minimize profits in the process. Hedging costs money.

So it's all about finding the right balance, get an idea of how much you can make with no hedging (realistically when the market is in your favour) and balance that out with how much you could lose if the market did it's worst. You need to then formulize a plan to hedge out most (but not all) of the losses for you worst case scenario - so you live to trade another day - while still making a profit in the good times. It's only something you can work out depending on your strategy.

I lose about 30-40% of my profits every month on hedging. But it's a necessary evil - because I would have gone bust (or would have been stung badly) twice in the last 6-8 months if I'd not placed these trades.
 
itspossible said:
Good question.If you have a low risk tolerance i would suggest that you trade small so if you do lose it will not hurt.Only enter a position where you expect movement and dont hold too long.you will either win or lose.if your timing is good and other factors are with you you may have a slight edge.Obviously you must set a stop and take it like a man-say £30 stop.
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I would suggest not to walk that path alone.. that's not a game so it' s better if you're assigned an account manager and do it professionally. At uniqoption.com they are helping me go safe. Of course I have all the stuff analysis, economic news..i'm learning!! for the moment i'm enjoying their social trading feature (that's copying their best traders ;) )
 
zaysev36 said:
From those answers it seems clear to me that I just can't word my question correctly :confused: I'm not afraid of risk, nor do I refuse to accept them. But the point of this thread was to find out the way to minimize risks as much as possible, while still continuing trading and making some profits (scanty, I believe, but still). Some specific strategies, i.e. hedging.
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I think study in the area of expectancy might help you feel more comfortable about trading. This concerns the concepts of having an edge, win rate, risk-reward ratio, variance/standard deviation, risk of ruin, risk & money management.

Quite a few traders (including professionals) don't seem to really get those concepts - a friend of mine asked me to run a workshop for his team of traders (at a hedge fund) to illustrate these concepts using poker and casino games.

I did study this material a lot in my poker days, and i am finding that it now helps me a lot in my trading work.

Does that sound interesting to you?
 
There are no free lunches trading. I suggest you try auctioneering other people's goods or something safer but there are still risks involved.
 
Pat494 said:
There are no free lunches trading.
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There is. When I did a contract at a large hedge fund, they gave free and unlimited lunches and drinks. Special take outs on Friday delivered straight to the desk. I always went for chicken curry, unless they were doing pizza. They even did free skiing holiday for non-employees. But I was not keen. Curry was as much as I could handle.

Lunches were free and rich even at smaller funds.
 
Understand the complete forex trading industry. Short term trading is a good way to go broke without a lot of skill and luck.
 
One would be able to risk more on say 2 safe trades a week and less ( like 1% ) on multi daily trades.
 
zaysev36 said:
I was wondering... Say, my risk tolerance tends to zero, but I still want to make money trading - what is the best way for me? So far my number one pick is covered calls, but I'm curious if there are other options. I'd be happy if you could share your wisdom with me :smart:
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Don't trade.
 
Safest way to trade is only use demo account, although losing all capital but still free because not use own money, or if trader still enforced trade in real account they can follow this tip
First step open mt4 and login your account, second step look with eye movement of any pair, then third step, be patience and closed your mt4 platform awhile, then repeat first step and second step also third step until you bored
 
radex78 said:
Safest way to trade is only use demo account, although losing all capital but still free because not use own money, or if trader still enforced trade in real account they can follow this tip
First step open mt4 and login your account, second step look with eye movement of any pair, then third step, be patience and closed your mt4 platform awhile, then repeat first step and second step also third step until you bored
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Yeah, I kinda get the idea of demo account :LOL: But again, what was my initial point is to find out the way to make at least _some_ profit while having minimal risks.
 
zaysev36 said:
Yeah, I kinda get the idea of demo account :LOL: But again, what was my initial point is to find out the way to make at least _some_ profit while having minimal risks.
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I am also still trying and learn how to minimize this risk, sometime felt bored and messed up after losing in trading, and I am realized about psychology trading is one key to become success I think
 
radex78 said:
I am also still trying and learn how to minimize this risk, sometime felt bored and messed up after losing in trading, and I am realized about psychology trading is one key to become success I think
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What do you mean by this? As far as I understand most trading methods are trying to read, analyze and predict human psychology in one way or another. So what exactly are you talking about?
 
As you learn well your business wil grow up and you can earn easily and safe. There will have little chances for being loss. On the other hand if you don't know very well you have to count losses. So there is always chances for loss.
 
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