Trade Anything that Moves

Asad Dossani
I recently came across an article talking about NSE bond futures. These are relatively new to the Indian market. NSE bond futures are futures contracts on Indian government bonds. You can use them to hedge or speculate on changes in interest rates.

The article asked a simple question? Why trade NSE bond futures? To which the answer was: Because it moves. As a trader, you should trade anything that moves. This makes a lot of sense.

As traders, we have short holding periods. Our goal is to predict price movements, and trade accordingly. Get in, get out, and hope to make a profit. Does it really matter whether we're trading a stock, or a currency, or a bond future?

Unlike investors, we are not buying into a business. That doesn't mean we don't care about what we're trading. But we care about it for the purpose of understanding its price action. If I'm trading a stock, I'm more interested in how its price moves, rather than its underlying business.

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A bond future and a stock are going to behave differently. So your trading strategy for each of these wouldn't typically be the same. But in both cases, we're studying the same thing. Our goal is to understand how the prices move, so that we can profit from it.

In addition to increased profit opportunities, a big benefit to trading anything that moves is diversification. The more assets you trade, the more diversified your trading portfolio is. This is especially true if you trade across different asset classes such as stocks, currencies, commodities, etc.

And you can use many of the same tools you already use when trading something new. For example, the algorithms I use are applicable to any asset class. Again, it won't be the same strategy for all assets, but the same method to identify trading opportunities will work. If you are a chartist, you may use different indicators and identify different patterns. But your underlying method is the same, regardless of what you're trading.

So remember: Do trade anything that moves.

What assets do you currently trade, or would like to trade? Share your views in the Club or share your comments here.

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1 Responses to "Trade Anything that Moves"
RAJKUMAR S D
12 Aug, 2015
Excellent idea, but explain little elaborately for trading in different assets class and how to get data or information for the same. Thanks with regards Like 
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