What are the Right Questions to Ask Before Trading?

TOOLS OF THE TRADE

     Before Actual Trading: Knowing Where, How to & Why?

       a. Knowing the instruments contract specifications, correlation with other markets. Access to other primary & secondary markets are essential to trading as an "Arbitrary Hedging Strategy" for qualified traders and investors.
       b. Rules of trading for stocks, forex and other instruments such as ETF and indices.
       c. Risk / Reward & Time Management
       d. Developing Skills for trading from reliable resource persons with actual experience and with trading authority of the markets.
       e. Learning the Tools of the Trade and strategies available takes center stage in any trading activity.
       f. Efficiency of the Trading Platform (Price comparison for accuracy) other than being user-friendly.

  Market Analysis & Strategies:

  * Level of Sophistication in the Financial Markets
  * Fundamental Factors affecting price fluctuations
  * Technical Perspective of the trade setups
  * Price Action & Market Behavioral Analysis
  * Structured Strategies which includes leverage trading to level-off the playing field of the market and its participants.
  * Access to other instruments relative to underlying asset class
  * Contingency Trade Plans in secondary markets (Proper Arbitrary Hedging) on correlated instruments in preserving wealth and capital growth through structured strategies in the global markets.

      4. Comparative functions display of trading platforms to suit traders / investors needs.

  * Price Accuracy & Discrepancy on spreads/ The 5th Decimal Point - differentiating Retail FX from Interbank / OHLC / Consistency / Real Time Source / Slippage / Requotes, Glitches and encourage to at least have two systems for price quote comparison is essential.

A clear example of brokers fined by SFC on order / execution & an asymmetric price slippage online FX dealing with Rakuten Securiites HK - FXCM Asia as of 10.19.2016 


  * Flow Chart of Orders (Online Trading) ECN and /or STP with actual Liquidity providers and not from price feed contributors that are incorporated in the platforms (Transparency & Confirmation of Orders - a must know). That 's why most brokers emphasize a non-dealing desk operation as an advantage where no human interventions takes place. But we need to go beyond this statement to make certain that all orders goes  effectively in a "Straight through Process" in the system with a counter-party confirmation when asked for. This is one of the requirements with the Commodity Futures Trading Commission or better known as the CFTC (Not only for futures) and other duly authorized regulating body would provide in other countries. You may want to check Financial Industry Regulatory Authority for investors and professional traders at FINRA .org

 * Go beyond trading & charting systems to achieve reasonable net positive returns on investment by building-up equity over capital investment to cover random losses that may occur over a period of time, and not coming out from the trading capital.   
    
   Reference & Resource Information: How Effective is a Forex Demo Account? ,  How accurate are dealing prices in FX? , and What is Asymmetric Price Slippage?
 
  * Knowing where to access correlated information on instruments trading in global stocks, equities or Foreign Exchange Rates required while trading the market.
  * Trading Support group from institutions holding investors account. Other services and instruments being offered that may reasonably be more helpful in improving returns with a modernize portfolio management model that meets investors financial interest. 
 

 4. What will be the effect if you fail to ask these questions?

    Not everyone is made to trade the financial markets. Failure to do the listed proper due diligence would result to a very expensive experience which can be avoided by considering the above checklist defined in this important information which has been provided a useful yet effective guideline.