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Winter Market Predictions For The End Of 2022

The probability of a recession in 2023 is fast rising. Although the markets have stabilized a bit, the rest of the year, 2022, seems unpromising for investors, with both equities and government bonds posting negative returns. 

Below, I have outlined the market predictions for this winter season of 2022.

The Chances Of A Recession In 2023 The primary reason for a recession prediction is the inverted yield curve. So far, the spread between the yields on the 10-year and 2-year treasury bonds is the most negative than it has been in 40 years.

The Federal Reserve Board is currently focused on payrolls and wages as the leading indicators for the U.S. economy and these factors have remained overheated.

On the other hand, the eurozone and the United Kingdom need help to avoid the coming recession due to the surging natural gas prices. China’s resurgent lockdown protocols against the Covid-19 pandemic have also weakened its economy, but it should recover by early 2023.

It is expected that if household and corporate finances remain strong, the recession can be limited to a mild one. The Inflation could be moderated, and the U.S. could experience a recovery in real spending power. 

This will, however, be determined by the Federal Reserve Board slowing down their tightening and pausing pace to a moderately restrictive level.

The Russia-Ukraine war and the increase in energy costs have played quite a role in the high inflation rate in 2022. Another factor was the cost pressure caused by pent-up demand as economies had just re-opened from the compulsory lockdown.

Core Inflation

Core inflation, which excludes energy and food costs, is at the edge of peaking in most regions. Durable goods prices have been the cause of the rise in core inflation. 

This is because the demand for these goods largely increased during the pandemic while the supply was blocked due to restricted production. As the supply chain normalizes, the prices for these goods will likely decline because the demand will move from goods to services. 

This should cause the core inflation in the U.S.U.S. to fall over the next few months of winter. However, for Inflation to fall close to 2%, it will require a reduction in employment creation and for wage growth to reduce from the current 7% annual rate of increase.

Will The U.S. Dollars Remain The Strongest Currency?

The U.S. dollar, in trade terms, has been the strongest currency since the Plaza Accord era in the mid-1980s. However, 2023 might see its decrease in value. 

The European economy will also improve when the Chinese economy rebounds by fully resuming production and ending the zero-tolerance Covid-19 lockdowns. This is because of the vital link between the two economies.  Follow me on Linkedin for more content like this!

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Want To Get Started In Trading? Read This

Online trading activities have increased tremendously over the years, and technology has made it even easier for anyone with an Internet connection, mobile device, or laptop to trade conveniently.

However, this does not mean that trading should be treated with levity or engaged without knowledge or skills. As a beginner in trading, there are some essential things you have to keep in mind.

As a professional trader and marketing expert, I am committed to helping and guiding other traders on the right path in trading. Below are 3 essential tips that every beginner in trading should adhere to.

3 Essential Tips For Anyone Getting Started In Trading

Do The Necessary Research Online trading requires adequate research. As a beginner in trading, you must research the market you wish to trade and find reliable brokers.

When looking to choose a particular broker, you have to research well. You can do this by reading reviews on them to know their services, how they thrive, and their platforms. You should also note that their platforms are user-friendly and essentially suitable for beginners.

Ensure that they are properly regulated and licensed. You should also check the list of trading assets to know the options you have to choose from to diversify your trading portfolio.

After selecting your broker, you have to decide which asset to trade. This process also requires diligent research. Understanding each asset will help you to make smarter trading decisions. The current market trends should also influence your asset choice.

As I always talk about on my blog, some of the assets you can trade include stocks and stock indices, CDFs on Forex, commodities, and cryptocurrency. You should diversify your portfolio if the market moves against your prediction; you won’t lose all your money.

Start With A Demo Account When starting, it is advisable to start with a free demo trading account so that you can test out your strategies. Most licensed brokers offer demo accounts for traders with virtual funds. Thus, you can practice and gain skills and experience with it.

The demo trading accounts are similar to the existing ones, making it easy for you to familiarise yourself before trying your hand at the real thing. You can use the practice trading accounts on different platforms to find the best suits you.

Exercise Patience Trading always takes work, although you get better as you gain experience. As a beginner, it might be challenging since you’re new to the market. However, this is where patience plays out. You must be patient, draft a strategy that works for you, and enjoy the process.

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The Best Podcasts Every Trader Should Listen To

Podcasts are a fun and informative way to learn about your day. Traders should consistently listen to many educating podcasts to improve their trade game and keep up with the market. I am a professional trader and marker. 

I have been in the market for many years and have grown to a commendable level. I am a former hedge fund trader specializing in options, stock, and futures trading. 

I also have a unique trading technique called the Shadow Blitz that gives traders an insight into the market's direction. Subscribe today and always be ahead of the market. 

Podcasts are also a great way to relax and learn simultaneously. I have outlined some of the best podcasts every trader should listen to below.

  The Best Podcasts Every Trader Should Listen To Sustainable Trading with Lance Ippolito In this podcast, I talk about online trading as a career, how perceptions of trading have changed, how to learn from your mistakes, the importance of a long-term view, and recognizing that you may not get rich quickly. Chat With Traders This is one of the best podcasts I recommend as you listen to conversations between highly talented traders. 

These traders engage in the options, stock, crypto, futures, and forex market. You get to hear them share their growth experiences. You can pick up many skills, tips, techniques, and motivations. 

Trading Justice This podcast helps traders by teaching them how to invest in options, futures, stocks, and crypto. 

Trading Nut This podcast is one of a kind. It reveals loads of money-making tips and knowledge sourced from pro-traders.

Rule-Breaker Investing Podcast

According to his Bestselling book, Rule-Breaker Investing, one of the most trusted and respected sources in the investment market, David Gardner shares insights on how to be innovative and intelligent with investing.

Safe Day Trading The Safe Day Trading podcast teaches students how to trade the markets on a short-term basis. The podcast aims to make day trading simple, fun, and easy to learn and understand; while giving formal education. 

The podcast shares a wealth of knowledge, making you feel like you have years of experience from applying each teaching. Students can, thus, quickly become profitable and successful traders in no time.

How To Trade It This is also an insightful podcast where other traders share their different experiences. Thus, you learn many actionable tips and tricks and pick up ideas for turning your life or career as a trader into a success story.

The Modern Stock And Options Trading Show Russ Matthews, a portfolio manager and professional investment educator, hosts this podcast. He shares many insights with each episode that help to boost your portfolio instantly. 

The Stock Trading Reality Podcast

This podcast also features interactive discussions between reasonably established traders in the market. They share tips, techniques, success stories, etc. It provides a great learning benefit for all traders.

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Understanding Common Different Types of Trading

What kind of trader are you? Do you feel the adrenaline from the fast action on the charts? Or do you prefer the long-term trading game?

There are numerous trading styles to choose from, each with its pros and cons. Over the years, many new additions to the world of trading have occurred due to financial innovation, and traders worldwide now have a much larger option to choose their trading styles.

If you'd love to know more about the different types of trading, I've covered six common types in this article to help you. So, keep reading to find out. 

Day Trading

Day trading is buying and selling a financial instrument multiple times on the same day to capitalize and compound small price movements. In day trading, all positions are closed before the market closes for the day.

Intraday trading allows traders to take leveraged trades and earn higher profits than usual. Leveraged trading is also why almost all intraday traders are unsuccessful over time.

Swing Trading

Swing trading is frequently regarded as the most challenging trading technique. Swing traders typically examine the chart for varying lengths, such as 5 minutes, 15 minutes, 1 hour, or even a day chart, to identify price fluctuations.

Volatility is a swing trader's best friend, not the other way around. Indeed, the higher the volatility of a stock, the better the income opportunities for swing traders. 

As a result, if accurate wave prediction is your forte, swing trading is all you need.

Scalping

Scalping is a type of day trading. While day traders identify opportunities and stay invested throughout the day to profit, scalpers, create multiple short-term trades to benefit from the waves.

A scalper must have keen observation skills, extensive experience, and the ability to execute actual trades.

When scalping the markets, trading costs are emphasized even more because scalpers typically use very tight stop-losses, allowing them to increase their position sizes.

Scalpers open large numbers of trades daily because scalping is a very active trading style. It's not uncommon for a scalper to open dozens of transactions daily, necessitating active trade management and spending lots of time on trading platforms.

Momentum Trading

Momentum trading is one of the simplest types of trading in the stock market. Momentum traders attempt to forecast a stock's momentum to enter or exit at the optimal time. 

For example, the momentum trader will leave if a store is about to break out or has already broken out. If a stock falls in value, they buy low and sell high.

Long-Term Trading

Long-term trading is the most secure of the various types of trading. This trading style is better suited to conservative investors than aggressive ones. 

A long-term trader evaluates a stock's growth potential by reading the news and market moves, researching the industry, analyzing the balance sheet, and learning about the economy. 

They usually hold stocks for years, decades, or even a lifetime.

Positions Trading

Position trading entails trades that last from a few weeks to a few months and sometimes even a few years. It is the closest style to long-term investing in trading.

In general, the likelihood of success increases as one progresses from day trading to positional trading. Positional trades have a good chance of success because the long-term market structure for most markets is upward.

There you have it. Our list of common trading styles helped you understand more about your technique. Remember to trade to live, but don't live to trade.  Read Next: I Wanted to Trade Tesla Earnings, But the Order Flow Said ‘No Way’

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Top Skills Every Professional Trader Needs

The trading world is cutthroat and super risky despite the possibility of making enormous wealth to last a lifetime. 

To be a professional trader, you must have skills that will help you wade through its murky waters and empower you to work under high pressure and in highly competitive environments.

These skills will also help build relationships, know how to buy and sell good assets, bonds, and shares, and develop strategies to reduce risk and maximize profits. 

Below, I have listed a few skills you should have to be successful as a professional trader.

Numeracy Skills

Trading involves playing around with numbers using basic numeracy skills such as adding, subtracting, multiplying, and dividing while working on different variables in the market. 

You might also need more complex mathematical knowledge, like interpreting data and working with statistics.

Analytical Skills

As a trader, you would need to study many patterns and trends in the market. You need analytical skills to analyze those trends and forecast the next step to yield the necessary profit. 

Analytic skills also help you spot critical data that may affect your trades.

Ability to Work Under Pressure

Another skill you need as a trader is the capacity to function under duress. While trading, you are frequently under pressure due to the ever-changing situation in the financial market. 

You must thus be able to use good judgment and adequate decision-making in such circumstances.

Research Skills

Sometimes you might need to research unknown areas and obscure strategies to up your trading game. 

This way, you can better prepare for market shifts and new trends and comprehend how those trends can impact trades. 

Doing your own research and analysis can ultimately set you apart from other traders who might prefer sticking to the status quo.

Self-control Skills

Since trading is a hazardous venture, you will almost certainly suffer some losses. 

Self-control and discipline are required at this time to control your emotions and prevent you from rushing back into trading recklessly and incurring further losses without adjusting your approach.

Record Keeping Skills

Having good record-keeping skills can make it easier for you to monitor your progress throughout your trading journey. 

These include keeping detailed records of all your plans, strategies, and trades. Additionally, you may always review such records to examine historical trends, make adjustments, and enhance your tactics.

Adaptability

Due to changing consumer preferences, economic policies, and other factors, the financial market is constantly changing.

As a result, you must be adaptable as a trader and adjust your strategy according to patterns and trends to be noticed when such developments occur.

Interpersonal skills

Interpersonal abilities support the development and maintenance of connections with others. 

No man is an island of knowledge. Hence, good interpersonal skills will enable you to communicate with the trading community and occasionally exchange tips and tactics to improve your trading performance.

Summary

While all these trading skills are critical, trusting your guts also comes in handy. Sometimes you might be right, and other times you might be wrong, but that’s just part of the experience that comes with trading.

Till next time!

- Lance Ippolito

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How To Start Trading With Any Amount Of Money

Trading involves buying and selling securities and equities and getting involved in the money market, where short-term techniques are used to profit. 

In the trading world, the goal is to benefit from price and volatility variations in the near term. Buying and keeping stocks long-term is the hallmark of casual investing, focusing on capital appreciation. 

Taking the plunge from passive investment to active trading is a massive lifestyle change.

Therefore, before making the change, it's crucial to understand the repercussions, such as paying higher fees, which could wipe out your earnings.

In this article, we'll discuss how to start trading with any amount.

Use leverage

Leverage trading occurs when a trader uses the options or futures markets to increase their potential profit. 

Because of the high degree of leverage in these exchanges, just roughly fifteen percent of the trade's value must be delivered in cash. 

One estimate is that you must pay 30% of the value of a transaction involving individual stocks and shares in money at the outset.

By applying leverage, you can compete on a higher playing field than you would be able to without it. Before you begin, you should educate yourself on this topic.

Take manageable risks

Some investors who desire to pursue a high-risk, high-reward strategy believe they have more room to maneuver because they start with less money.

 However, when investing, it's usually best to steer clear of volatile stocks.

If you gamble heavily and it doesn't pay off, you can lose all you started with. It's not just a matter of losing a little percentage of it; total loss is possible.

You should adopt a risk-averse strategy if you need to preserve the purchasing power of your investment and hope to increase it, even slightly and gradually.

The risk-to-reward ratio comfortable for a trader with a modest starting account is 1:3.

People often use the "one percent risk rule" as a general rule. It's akin to your safety net if you deal with more significant sums. 

However, you'll need to be patient even when witnessing a plunging market.

Put your money away regularly in a mutual fund.

If you don't have a sizable sum to invest all at once, consider investing a specific amount of money each month in a mutual fund.

The mutual fund sector is another sphere significantly altered by technological developments.

Various risks are associated with these funds because they are handled independently. 

A mutual fund is an option; further contributions are welcome monthly. Having a financial advisor do this for you so you don't have to decide where to invest your money is the same.

Use a demo trading account.

There are many online applications and platforms where you can get some trading experience as a starter without any real cash. 

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6 Common Mistakes New Options Traders Need To Avoid

Options trading is a desirable tool for traders seeking greater leverage. You have more control over your leverage than when trading spot markets because you can choose your strike and trade size.

Any trader who executes option trades correctly is almost guaranteed to make money despite market volatility. However, I have noticed that many people still make mistakes while trading options because they lack experience or receive improper advice from another trader.

So, I have written six errors that I have personally experienced while trading, which you should avoid if you are a rookie starting out in options trading.

Overtrading

My first rule for any financial investment is to avoid being greedy. In options trading, this comes in the form of overtrading, a common mistake made by rookies. 

No matter whether you are in a winning position, you should never add more than you have planned. If you do, you risk losing all of your money in one trade if the market turns against you.

Also, never think you can make up for a losing streak with one big score. Take time out to re-strategize after such losses before you make your next trade.

Buying Cheap Call Options

When something is cheap, there is almost always a catch to it. I do not recommend always purchasing cheap call options as it is a quick way to lose your money when trading options. 

These options are alluring because of the enormous potential returns they promise, which do not always materialize. Only invest in inexpensive call options if you have enough confidence in the direction of price movement after doing your due diligence.

Being A One Trick Pony

Rookies with only one trick up their sleeves are bound to encounter a massive loss sooner than later. What might work for a couple of instances might not fit in for other cases due to the unstable nature of the market. 

In my experience, you must map out several strategies to help you adapt to any changes and to ascertain the risk and reward potential in the available options.

Forgetting The Time Factor

In the business of options trading, time plays a huge part. Most new options traders forget to be on guard to monitor the time decay of options. You must always account for time constraints for any trades you are making because the value of your options decreases with each passing day.

Lack Of Exit Strategy

New traders sometimes fail to map out an exit strategy when trading options. When the market reverses course despite your carefully considered projections, exit plans such as using a stop loss will help mitigate the loss of your money. 

For any trade, you should have an exit strategy because, unlike regular stocks, you cannot hold options for a long time in hopes of a rebound.

Lack Of Awareness Of Events That May Change The Market

When anything in the real world affects the market, even the best-laid plans could go awry. Rookies frequently believe that their tactics are enough to generate profits and fail to monitor forthcoming market-moving events relating to their particular options.

For one, major economic events cause the market's state to alter quickly. Thus, your approach must take this into account. If you don't have an appropriate plan, you can take a break from trading at that time to avoid the uncertainty that such events would bring.

If you had taken out time to search for top traders, you would have probably seen my name, Lance Ippolito, pop up several times. Above are some of the mistakes I had to overcome to get to the top.

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Are Penny Stocks Risky? Four Things You Must Know To Secure Profits

If you are an investor looking to make money in equities, you often come across penny stocks in the market. These stocks tend to trade at a value that is less than $5 per share. Also, they are issued mainly by companies who, for some reason, do not meet the requirements to be on major exchanges such as the New York Stock Exchange (NYSE).

From my years of experience dealing in the financial market, I, Lance Ippolito, a top trader,  have garnered that investing in such securities is very risky due to their inherent volatility and vulnerability to price manipulation. There is always a high chance that your investment in penny stocks will only yield loss and not profit. But occasionally, a penny stock can handsomely reward you if you diligently marshal out the right plan to secure profit.

So, if you are hell-bent on investing in penny stocks, here are four things from me that you should know to help increase your chances of securing profits.

Don't Make Very Large Investment

Investing in penny stocks remains a risky prospect regardless of its potential. Therefore, don't commit much of your money to it. Penny stocks should be less than 10% of your total equity portfolio. If your entire investment portfolio in stock is $1,000,000, you should only be ready to risk less than $100,000 for investing in penny stocks.  

Invest In Only A Few Penny Stocks.

While many people might desire to apply the diversification principle, which is effective for large equities, the situation is the exact opposite for penny stocks. Invest in a select few penny stocks rather than buy just anything you see. If you invest in so many cheap stocks, even if their share prices grow, you won't be able to generate any significant returns from them.

Choose Only High-Quality Penny Stocks

Since you don't have the liberty to spread your money across numerous penny stocks, investing just in high-quality penny stocks will boost your chances of securing profits. Several internet forums of financial portals give advice and other information about penny stocks. However, the best bet is to conduct your own study before investing any money in any stocks.

Ventures founded by seasoned executives who have successfully exited a prior company and stocks with promising performance in the biotechnology or renewable resources industries are examples of good possibilities. You could also invest in once-great companies in the hopes that they would recover in the long run.

Monitor Your Investments

The purchase of penny stocks should be considered a short-term gamble rather than a long-term investment plan. Once you have committed your finance to some penny stocks, you must monitor them like every other investment in your portfolio. It might be time to sell, or at the very least, record some profits, if the stock saw a significant climb. Set a goal and leave when it is attained. Don't get greedy and change your plans halfway, as it could turn out for the worst.

Till next time! - Lance Ippolito