Spencer Li

How to Profit from Inflation? (With 33 Types of Asset Investments)

Thumbnail How to Profit from Inflation

Thumbnail How to Profit from Inflation

 

Wondering what the deal is with inflation and how it affects the economy?

No worries, we’ve got you covered.

Inflation is when the overall price of stuff goes up over time, which means the same amount of money can buy less.

There are a few things that can cause it, like more demand for stuff, higher production costs, or more money being available.

In this blog post we’ll talk about the different types of inflation, how it can affect the economy, and some ways you might be able to profit from it.

 

What in Inflation?

Inflation is when the overall price of stuff goes up over time, which means the same amount of money can buy less.

For example, if inflation has driven up the price of everything, that means the same amount of cash is now worth less because it can buy fewer things.

There are a few things that can cause inflation, like more demand for stuff, higher production costs, or more money being available. Inflation can also happen when there’s less stuff available, like during a recession or war.

To measure inflation, we use something called the consumer price index (CPI), which tracks the prices of a bunch of things that households usually buy.

The CPI helps us calculate the rate of inflation, which is the percentage change in price over a certain period of time.

The Federal Reserve (the central bank in the US) uses the rate of inflation as part of its decision-making for monetary policy.

There are different types of inflation, like demand-pull (more demand than supply), cost-push (higher production costs), and structural (problems in the economy like using resources poorly or not having enough stuff).

Impact of Inflation

Inflation can have both good and bad effects on an economy.

On the plus side, it can boost economic growth by encouraging people to spend and invest more, since they might want to buy things before prices go up even more.

Inflation can also make debt less of a burden, since the value of the debt decreases over time due to the decrease in purchasing power of the currency.

On the downside, inflation can create uncertainty and instability, since people might be hesitant to make long-term financial plans because of how hard it is to predict.

Inflation can also disproportionately affect certain groups, like people with low incomes or fixed incomes, who might not be able to handle price increases as easily.

To manage inflation, we use monetary policy, which is when we control the supply of money and credit in an economy.

Central banks, like the Federal Reserve, can use things like interest rates, reserve requirements, and open market operations to influence the supply of money and credit in order to keep prices stable.

How to Profit from Inflation

There are a few ways you might be able to profit from inflation:

  1. Cash: While cash may not provide a high return, it can be a good way to preserve purchasing power during times of inflation. It’s important to keep in mind that the value of cash may be eroded over time by inflation, so it may be necessary to periodically reevaluate the amount of cash you hold in your portfolio.
  2. High-yield savings accounts: High-yield savings accounts are savings accounts that offer a higher interest rate than traditional savings accounts. While the returns on these accounts may not be sufficient to fully offset the impact of inflation, they may provide a way to preserve the purchasing power of your savings.
  3. Fixed deposits: Fixed deposits, also known as term deposits, are a type of investment product offered by banks and other financial institutions. They are characterized by a fixed term and a fixed interest rate, and are often considered to be a low-risk investment option.
  4. Stocks (general): While stocks can be volatile in the short term, they have historically provided good returns over the long run, including during times of inflation. Companies may benefit from inflation because they can pass on higher costs to consumers in the form of higher prices.
  5. Small cap stocks: Small cap stocks, which are stocks of smaller, less established companies, may be more sensitive to changes in the economy and may outperform larger cap stocks during times of inflation.
  6. Emerging market stocks: Stocks of companies in emerging markets, such as China and India, may be a good choice during times of inflation because these markets may be less affected by rising costs.
  7. High dividend-yielding stocks: Stocks that pay a high dividend yield may provide a steady stream of income that can help to offset the impact of inflation on purchasing power.
  8. Infrastructure stocks: Companies that own and operate infrastructure assets, such as utilities and transportation companies, may benefit from inflation because they can pass on higher costs to consumers in the form of higher prices.
  9. Natural resource stocks: Companies that own and operate natural resources, such as oil, gas, and mining companies, may benefit from inflation because the demand for their products tends to remain stable and because they can pass on higher costs to consumers in the form of higher prices.
  10. International stocks: Stocks of companies based in other countries may be a good choice during times of inflation because they may be less affected by rising costs in the domestic economy. However, it’s important to be aware of the potential risks associated with investing in international stocks, such as currency risk and political instability.
  11. Preferred stocks: Preferred stocks are stocks that pay a fixed dividend and have priority over common stock in the event that a company goes bankrupt or is liquidated. Preferred stocks may provide a steady stream of income and may be less affected by inflation compared to common stocks.
  12. Real estate: Real estate can be a good hedge against inflation because the value of property tends to increase over time. As the cost of living goes up, the value of real estate may also appreciate.
  13. Agricultural land: Agricultural land can be a good hedge against inflation because the value of land tends to increase over time and because the demand for food typically remains stable even during times of economic uncertainty.
  14. Timberland: Timberland can be a good investment during times of inflation because the demand for wood products tends to remain stable and because the value of timberland can appreciate over time.
  15. Infrastructure bonds: Infrastructure bonds are bonds issued by companies or governments that fund infrastructure projects, such as the construction of roads, bridges, and airports. These bonds may provide a steady stream of income and may benefit from inflation because the value of the underlying assets may appreciate over time.
  16. Floating rate bonds/notes: Floating rate bonds or floating rate notes (FRNs) are bonds that pay a variable interest rate that is tied to a benchmark rate, such as the London Interbank Offered Rate (LIBOR). These bonds may be a good choice during times of inflation because the interest rate adjusts as market rates change, helping to preserve the purchasing power of the bond’s income.
  17. Treasury Inflation-Protected Securities (TIPS): These are bonds issued by the U.S. government that provide a guaranteed return above the rate of inflation.
  18. Inflation-linked bonds: Inflation-linked bonds, also known as linkers, are bonds that provide a return that is linked to the rate of inflation. These bonds may be issued by governments or corporations, and may provide a way to protect against the erosive effects of inflation on the purchasing power of the bond’s income.
  19. Corporate bonds: Corporate bonds are bonds issued by companies to raise capital. While the value of corporate bonds may be affected by inflation, they may also provide a steady stream of income that can help to offset the impact of rising costs. It’s important to carefully consider the creditworthiness of the issuing company and the overall risk of the bond before investing.
  20. Municipal bonds: Municipal bonds are bonds issued by state and local governments to fund public projects. While the value of municipal bonds may be affected by inflation, they may also provide a steady stream of tax-free income that can help to offset the impact of rising costs. It’s important to carefully consider the creditworthiness of the issuing municipality and the overall risk of the bond before investing.
  21. Index funds (general): Index funds are mutual funds or ETFs that track a specific market index, such as the S&P 500. While the value of index funds may be affected by inflation, they may also provide exposure to a diverse range of assets and may be a good choice for long-term investors.
  22. Real asset funds: Real asset funds are mutual funds or ETFs that invest in physical assets, such as real estate, commodities, and infrastructure. These funds may provide a hedge against inflation because the value of the underlying assets may appreciate over time.
  23. Balanced funds: Balanced funds are mutual funds or ETFs that invest in a mix of stocks, bonds, and other assets, with the goal of providing a balance of growth and income. These funds may be a good choice during times of inflation because they provide diversification and may be less affected by rising costs.
  24. Infrastructure funds: Infrastructure funds are mutual funds or exchange-traded funds (ETFs) that invest in infrastructure assets, such as utilities, transportation companies, and infrastructure bonds. These funds may provide a steady stream of income and may benefit from inflation because the value of the underlying assets may appreciate over time.
  25. Commodity funds: Commodity mutual funds or ETFs invest in a basket of commodities, such as gold, oil, and agricultural products. These ETFs may provide a hedge against inflation because the prices of commodities tend to rise when the cost of living increases.
  26. Real estate investment trusts (REITs): REITs are companies that own and operate real estate assets, such as commercial and residential properties. REITs may provide a steady stream of income and may benefit from inflation because the value of real estate tends to increase over time.
  27. Floating rate loan funds: Floating rate loan funds are mutual funds or ETFs that invest in floating rate loans, which are loans that pay a variable interest rate that is tied to a benchmark rate, such as the LIBOR. These funds may provide a steady stream of income and may be less affected by inflation because the interest rate adjusts as market rates change.
  28. Municipal bond funds: Municipal bond funds are mutual funds or ETFs that invest in a basket of municipal bonds, which are bonds issued by state and local governments to fund public projects. These funds may provide a steady stream of tax-free income and may be less affected by inflation compared to other types of bonds.
  29. Collectible assets: Certain collectible assets, such as art, antiques, and rare coins, can appreciate in value over time, especially during times of inflation when the cost of living is rising. However, it’s important to be aware that the value of collectibles can be difficult to predict and can be subject to significant fluctuations.
  30. Alternative investments: Alternative investments, such as hedge funds and private equity, may offer the potential for higher returns compared to more traditional investments, and may be less affected by inflation. However, it’s important to be aware that alternative investments are typically less liquid and more risky than traditional investments, and may not be suitable for all investors.
  31. Cryptocurrencies: Some investors believe that cryptocurrencies, such as Bitcoin, can be a good investment during times of inflation because their value is not tied to traditional fiat currencies, which can lose value as the cost of living increases.
  32. Commodities: Commodities such as gold, oil, and agricultural products can be a good hedge against inflation because their prices tend to rise when the cost of living increases.
  33. Master limited partnerships (MLPs): MLPs are companies that own and operate assets in the energy sector, such as pipelines and oil and gas wells. MLPs may provide a steady stream of income and may benefit from inflation because the demand for energy tends to remain stable and because they can pass on higher costs to consumers in the form of higher prices.

Concluding Thoughts

Inflation can have both good and bad effects on an economy, and it’s important to be aware of how it might impact your personal finances.

By understanding some ways you might be able to profit from inflation, like holding cash, investing in stocks or infrastructure, or buying inflation-linked bonds, you can take steps to protect the purchasing power of your wealth.

It’s also worth noting that while some strategies may help to minimize the impact of inflation on your purchasing power, they may not necessarily provide a profit.

Just keep in mind that no investment is a sure thing and it’s always important to carefully evaluate the potential risks and rewards before making any financial decisions.

Now that you have learnt all about inflation and all the different ways to profit from it, which assets are you planning to add to your portfolio?

Are there any other types of investments I have missed out?

Let me know in the comments below.

0 Comments/by
Spencer Li

Does an Inverted Yield Curve Lead to Recession, and How to Invest in Such a Market?

Thumbnail Does an Inverted Yield Curve Lead to Recession

Thumbnail Does an Inverted Yield Curve Lead to Recession

Looking to better understand the economy and financial markets?

The yield curve is a must-know!

This powerful tool shows the relationship between bond interest rates and payback times, giving us valuable insights into what people expect for economic growth and inflation.

But that’s not all – the yield curve can also impact financial institutions and even signal potential recessions.

In this blog post, I’m going to talk about what the yield curve is, why an inverted yield curve can lead to recession, and how to invest in such an environment.

 

What is the Yield Curve?

The yield curve is a chart that shows the relationship between the interest rate earned by investors on a bond and how long it will take for the bond to be repaid.

It’s usually plotted on a graph with the interest rate on the vertical axis and the time it takes to repay the bond on the horizontal axis.

 

normal yield curve

When the curve is going up, it means that bonds with longer payback times have higher interest rates than bonds with shorter payback times.

This is called a normal yield curve.

 

Yield Curve

When the curve is going down, it means that bonds with shorter payback times have higher interest rates than bonds with longer payback times.

This is called an inverted yield curve.

What Can the Yield Curve Tell Us?

The yield curve is a really important indicator of what’s going on in the economy because it gives us an idea of what people expect to happen with economic growth and inflation in the future.

A normal yield curve usually means that the economy is doing well and that people expect economic growth and inflation to pick up in the future, which is why they’re willing to accept lower interest rates on long-term bonds.

An inverted yield curve, on the other hand, often means that the economy isn’t doing so hot and that people expect economic growth and inflation to slow down in the future, so they want higher interest rates on long-term bonds.

What Affects the Shape of the Yield Curve?

There are a few things that can affect the shape of the yield curve.

One of the biggest factors is the level of short-term interest rates set by the central bank.

When the central bank raises short-term interest rates, it can lead to an upward sloping yield curve because investors want higher interest rates on long-term bonds to make up for the increase in short-term rates.

When the central bank lowers short-term interest rates, it can lead to a downward sloping yield curve because investors are willing to accept lower interest rates on long-term bonds due to the lower short-term rates.

The supply and demand for bonds can also affect the yield curve.

If there’s a lot of bonds available in the market, it can push down bond interest rates and lead to a downward sloping yield curve.

If there’s not a lot of bonds available, it can lead to higher bond interest rates and an upward sloping yield curve.

The expectations of market participants about future economic conditions can also influence the yield curve.

If people expect economic growth and inflation to pick up in the future, they might be willing to accept lower interest rates on long-term bonds in the hopes of getting higher returns later on.

This can lead to an upward sloping yield curve. If people expect economic growth and inflation to slow down, they might want higher interest rates on long-term bonds to make up for the lower expected returns.

This can lead to a downward sloping yield curve.

How Does an Inverted Yield Curve Lead to Recession?

Okay, so why does an inverted yield curve lead to a recession?

It’s all about how it can affect the behavior of businesses and consumers.

When the yield curve is inverted, with short-term rates higher than long-term rates, it can signal that investors are more worried about the short-term economic outlook.

This can make businesses less likely to borrow money for long-term projects, like building new factories or expanding operations.

And it can also make consumers less likely to take out long-term loans, like mortgages, to buy homes or cars.

When businesses and consumers are less likely to borrow and spend money, it can lead to a slowdown in economic activity, which can potentially turn into a recession.

An inverted yield curve can also affect the way banks and other financial institutions make lending decisions, which can further impact economic activity.

It’s important to note that the yield curve is just one indicator and no single indicator can predict the future with 100% accuracy.

But it can give us an idea of what people are expecting to happen with economic growth and inflation in the future, which can be helpful in understanding the potential risks and opportunities in the financial markets.

How to Invest in an Inverted Yield Curve Environment

So, you’re wondering how to invest during an inverted yield curve environment?

This can be tricky because an inverted yield curve is often seen as a sign of an impending recession, which is generally not good news for the economy.

However, there are a few strategies you can consider.

One option is to focus on defensive investments that tend to do well when times are tough.

These might include stocks in utilities, consumer staples, and healthcare companies, as well as bonds with shorter payback times.

Another strategy is to diversify your portfolio to include a mix of different types of assets.

This could mean stocks, bonds, real estate, and other alternative investments.

Diversification can help to spread out your risk and increase your chances of making some money over the long haul.

It’s also important to think about your investment time frame and risk tolerance.

If you have a longer time horizon and are comfortable with taking on some risk, you might be able to ride out market ups and downs and potentially benefit from a rebound.

But if you have a shorter time frame or are more risk-averse, it might be smart to be more cautious and reduce your exposure to risky assets.

Just keep in mind that investing during an inverted yield curve environment can be complicated and carries its own risks.

Concluding Thoughts

In conclusion, the yield curve is a really useful tool for understanding what people expect to happen with the economy and the potential risks and opportunities in the financial markets.

It’s important for investors, policymakers, and market participants to pay attention to the shape of the yield curve to get a sense of where the economy might be headed and what the potential implications might be.

Now that I have shared all about the inverted yield curve, what do you think are some of the best investment opportunities and strategies to use when the yield curve is inverted?

Let me know in the comments below.

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Spencer Li

The Rise and Fall of FTX & FTT Token (Will Investors Get Their Money Back?)

Thumbnail Rise and Fall of FTX

Thumbnail Rise and Fall of FTX

Are you ready to learn the truth about what really happened to FTX exchange and its founder, Sam Bankman-Fried?

Because it’s a wild ride.

In December 2022, Bankman-Fried was arrested on fraud charges by Bahamian authorities, and the collapse of FTX sent shockwaves through the cryptocurrency market.

The value of cryptocurrencies dropped billions of dollars and even fell below the $1 trillion mark in November 2022.

The impact of FTX’s decline will likely be felt for a long time and could potentially even affect broader markets.

Investors and customers have lost billions, and according to John Ray, the company’s replacement CEO, not all of it will be recovered.

In this blog post, I’ll going to cover the rise and fall of FTX and the FTT token, and whether investors are likely to get their money back.

 

What is FTX?

Firstly, what is FTX?

It’s a cryptocurrency exchange that was founded by Sam Bankman-Fried, who is the main villain in this saga.

A cryptocurrency exchange is a platform that allows individuals to buy, sell, or trade cryptocurrencies for other assets, such as traditional fiat money or other digital currencies.

These exchanges serve as the primary way that people buy and sell cryptocurrencies, and they provide a marketplace for traders to buy and sell cryptocurrency with each other.

Some exchanges only allow users to trade specific pairs of cryptocurrencies, while others offer a wider range of options.

Some exchanges are designed for professional traders, while others are more geared towards novice users.

What is the FTT token?

What is the FTT token and what does it have to do with FTX?

It’s a cryptocurrency issued by FTX, and FTT is the native token of FTX and was used on the platform for various purposes, like paying for things and accessing special features for traders.

The value of FTT was closely tied to FTX’s performance and reputation, so it experienced big price fluctuations.

The Rise of FTX

How did FTX grow so quickly?

The company was known for its aggressive marketing tactics, including a Super Bowl ad campaign and the purchase of naming rights to the home of the Miami Heat basketball team.

FTX was also involved in political lobbying and made donations to various causes, as well as working to support the overall cryptocurrency industry.

In addition, the cryptocurrency market has been volatile and has experienced significant growth in recent years, which may have contributed to the rapid rise of FTX.

The Fall of FTX

In November 2022, FTX filed for Chapter 11 bankruptcy protection after seeing its valuation plummet from $32 billion to nearly nothing in just a few days.

This also resulted in a significant reduction in Bankman-Fried’s net worth, which was previously estimated at $16 billion.

Right now, Bankman-Fried is being held in jail without bail and is fighting extradition to the U.S., where the case against him has been described as one of the largest financial frauds in American history.

Bankman-Fried claims to have around $100,000 in his bank account as of November 2022.

A class-action lawsuit was filed in Florida that same month, accusing Bankman-Fried of creating a fraudulent cryptocurrency scheme that targeted unsophisticated investors across the U.S., with celebrities including Steph Curry, Shaquille O’Neal, Shohei Ohtani, Naomi Osaka, Larry David, and Kevin O’Leary named as alleged accomplices.

Bankman-Fried has hired white-collar crime lawyer Mark S. Cohen to defend him, while Caroline Ellison, head of the FTX-affiliated Alameda Research, has retained the services of law firm Wilmer Cutler Pickering Hale and Dorr.

But it’s not just the legal issues that are causing problems for FTX.

Shady Practices of FTX

The company has been accused of questionable practices, including undisclosed leverage and the manipulation of cryptocurrency prices.

There have also been allegations of insider trading and self-dealing.

As the situation at FTX continued to develop, it became clear that the company had engaged in questionable practices, including the use of undisclosed leverage and the manipulation of the prices of certain cryptocurrencies.

These practices contributed to the rapid decline of the company and the loss of billions of dollars for investors and customers.

The Crash of FTT Tokens

In response to the situation, major cryptocurrency exchange Binance announced in November 2022 that it would sell its entire position in FTT tokens, which was valued at around $529 million.

Binance CEO Changpeng Zhao stated that the decision to liquidate the exchange’s FTT holdings was made to protect the interests of its users and the wider cryptocurrency community.

Following the announcement, the value of FTT tokens plummeted, causing further damage to the already troubled FTX.

Will Investors Get their Money Back?

In December 2022, FTX and its affiliated debtors filed a motion with the bankruptcy court seeking approval for the sale of four businesses, including Embed, LedgerX, FTX Japan, and FTX Europe.

The motion stated that the sale of these businesses was intended to raise funds to pay off FTX’s debts and to provide a return to its creditors.

As the situation at FTX unfolded, it had significant reputational consequences as well.

Bankman-Fried had been seen as a leading figure in the cryptocurrency industry, but the allegations against him and the collapse of FTX have tarnished his reputation and that of the company.

It remains to be seen how these events will impact the overall cryptocurrency market and the future of FTX and its affiliated companies.

Concluding Thoughts

So, what can we learn from all of this?

It’s a cautionary tale about the risks of investing in the cryptocurrency market, and it’s a reminder to always do your due diligence before putting your money into any investment.

The situation at FTX is still unfolding, and it remains to be seen how these events will impact the overall cryptocurrency market and the future of FTX and its affiliated companies.

But one thing is certain: this is going to be very bearish for the crypto market, and there are likely more companies that are going to get dragged down as more disclosures come to light.

And as for investors, the likelihood of recovering the full sum is very slim, but there is a good chance of getting at least something back.

Now that you know all about FTX and FTT, do you think this fiasco could have been avoided if more due diligence was done?

Were you one of the unlucky ones who got their money trapped in FTX?

Let me know in the comments below.

 

thumbnail the ultimate guide to blockchain and crypto assets

If you would like to learn more about crypto & DeFi, also check out: “The Ultimate Guide to Blockchain & Cryptocurrencies”

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Spencer Li

Weekly Market Wrap: The Bears are Back!

2022 09 12 15 31 31

Last week, it was an eventful week filled with exciting news release, such as the CPI (Consumer Price Index) and the FOMC rate announcements.

The CPI showed a lower than expected rate of inflation, so the markets rallied, but it turned out to be a false breakout as prices closed back down by the end of the day.

The next day, the FOMC announced rate hikes in line with expectations, but showed no signs of pivoting any time soon, so the bear market resumed (as we predicted), and prices started heading south.

There is a good chance of prices hitting new lows before the end of the year, so I will gradually accumulate more shorts as my profits (buffer) increase.

If you missed out on the excellent shorting opportunity last week, fear not, because there will be more pullback opportunities to short soon.

Join us for real-time updates and daily trading opportunities in our “Daily Trading Signals” Telegram channel!

 

2022 09 12 15 31 31

[Photo: Iskanderkul Lake & Waterfall, Tajikistan – See my full travel photo log!]

For our weekly market wrap, we go through some of the trade calls and analysis from last week, which gives us valuable insights for the week ahead.

We cover 3 main markets with a total of 200+ counters, so we will never run out of trading opportunities:

By covering a broad range of markets, we can focus our attention (and capital) on whichever market currently gives the best returns.

Click here to receive all these signals in real-time for only $67 a month! You will get several signals a day, and even taking just 1 trade the whole month can easily cover the fee, so what are you waiting for?

 

Weekly Market Outlook Video

Trading Signals weekly market outlook 131222

Weekly Market Outlook (11 December 2022)

2 major pieces of news this week:
13 Dec – CPI data
14 Dec – FOMC

Stock market indices are at crucial points, so I have placed price triggers so that we will know the moment any breakout occurs.

 

Portfolio Highlights

Trading Signals portfolio updates 131222

Weekly Portfolio Updates (11 December 2022)

With unclear direction on the stock market, the best strategy now is to hold bonds for high yields.

 

Forex & Commodities Market Highlights

Trading Signals NZDCHF 141222

NZDCHF is forming a tight consolidation above the support level, can consider going long with a tight stop below the support level.


Trading Signals CHFJPY 131222

Following up on CHFJPY, it has gone up +399 pips profit since we made the call. Congrats to those who went long! 💰🔥💪🏻

Now, we will continue to hold and see if it can break out of the huge bull flag and make new highs.

 

Trading Signals EURAUD 141222

Exactly as predicted for EURAUD, congrats to those who went long! 💰🔥💪🏻

 

Trading Signals EURCAD 131222

Following up on EURCAD, it is up +673 pips profit since our call! Congrats to those who went long! 💰🔥💪🏻

 

Trading Signals USDSGD 151222

Strong rebound on USDSGD as predicted, congrats to those who traded the bounce! 💰🔥💪🏻

 

Stock & Bond Market Highlights

market poll 171222

A market poll we did last week, and it seems almost 1/2 thought that the market will make new highs, while about 1/3 thought the market would make new lows.

 

Trading Signals all 3 markets 151222

After a false breakout a few days ago on the CPI data, all the 3 US stock indices (Dow Jones US30, Nasdaq 100 US100, S&P 500 US500) are now resuming the downtrend.

I have added more short positions. Will we see new lows before the year is over?

 

Trading Signals CPI news 141222

CPI with economist forecasts

 

Trading Signals FOMC news 121222

https://www.calculatedriskblog.com/2022/12/fomc-preview-50bp-hike-increase.html

 

Trading Signals fed news 161222

https://www.cnbc.com/2022/12/14/fed-rate-decision-december-2022.html

 

Trading Signals US stocks bonds return 121222

US Stocks vs Bonds Returns 1926-2022

 

Crypto Market Highlights

Trading Signals crypto news 131222

US prosecutors consider filing criminal charges against Binance and CZ for possible money laundering and sanction violations

Those with money in Binance, might want to start moving it out just in case:

https://www.reuters.com/markets/us/us-justice-dept-is-split-over-charging-binance-crypto-world-falters-sources-2022-12-12/

 

 

Click here to receive all these signals in real-time for only $67 a month! You will get several signals a day, and even taking just 1 trade the whole month can easily cover the fee, so what are you waiting for?

Good luck, and may next week bring more excellent profits!

0 Comments/by
Spencer Li

Tips & Strategies for Trading While Travelling

Thumbnail Tips Strategies for Trading While Travelling

Thumbnail Tips Strategies for Trading While Travelling

Are you ready to combine your love of trading and traveling?

Imagine waking up in a new city every few weeks, with the freedom to explore and experience new cultures while also making smart financial decisions and potentially earning passive income through the financial markets.

Trading and traveling go hand in hand, allowing you to live a nomadic lifestyle while still being able to earn a living.

Are you ready to join the ranks of successful traders who have turned their passion for finance into a globally-mobile career?

In this blog post, I will cover all the best tips for trading while travelling, and some simple strategies you can use to make it as stress-free as possible so you can still enjoy your holiday.

 

Infographic Tips Strategies for Trading While Travelling

 

The Right Mental State

Trading can be a stressful activity, especially when it involves significant amounts of money.

It’s important to adopt a stress-free mental state while trading and travelling in order to make better decisions and reduce the risk of making mistakes.

Here are a few tips to help you adopt a stress-free mental state while trading:

  1. Have a plan: It’s important to have a clear plan in place before you start trading. Know your goals, risk tolerance, and exit strategy before you enter a trade. This can help you stay focused and make better decisions.
  2. Take breaks: It’s important to take breaks and step away from the markets from time to time. Take breaks to clear your mind and relax. This means limiting your trading time to a minimum while on holiday.
  3. Practice mindfulness: Mindfulness is the practice of being present in the moment and not getting caught up in the past or the future. It can help you stay focused and make better decisions.

Tips for Trading while Travelling

Trading while travelling can be challenging, as it requires staying up-to-date with the latest market news and having access to a reliable internet connection.

However, with the right tools and strategies, it is possible to continue trading while on the go.

Here are some tips for how to trade while travelling:

  • Use a reliable trading platform: Choose a trading platform that is accessible from your smartphone or laptop, and that offers real-time market data and analysis. This will allow you to stay on top of market movements and make informed trading decisions while on the move.
  • Keep up with the news: Follow financial news outlets and use their app or website to stay up-to-date with the latest market news and analysis. This will help you understand the factors that are influencing the market and make more informed trading decisions.
  • Use stop-loss orders: Stop-loss orders are a useful tool for managing risk while trading. These orders allow you to set a maximum loss that you are willing to incur on a trade, and the trade will be automatically closed if this loss threshold is reached. This can help protect your capital while you are unable to actively monitor the market.
  • Use a VPN: A virtual private network (VPN) can help protect your online activity and keep your personal information secure while you are travelling. This is especially important if you are using public Wi-Fi to access your trading platform.
  • Always plan beforehand: Have a clear trading plan and stick to it, even while travelling, to help you stay disciplined and focused on your trading goals.
  • Track your trades: Stay organized and keep track of your trades, so you can easily review your performance and make any necessary adjustments to your trading strategy.
  • Less is more: Remember to take breaks and relax, as travelling can be stressful and can impact your ability to make good trading decisions.
  • Keep your trading plan simple: While it can be tempting to try and take advantage of every trading opportunity while you are travelling, it is important to keep your trading plan simple and focused. Stick to your trading strategy and avoid making rash decisions based on limited information.
  • Time zones and market conditions: If you are traveling across time zones, you will need to take into account the different trading hours of the markets that you are interested in. In addition, you may need to adjust your trading strategy to account for any changes in market conditions or liquidity that may result from your travel.
  • Use your “spare” time: When you are waiting at the airport, or travelling on long bus rides, you can use this time look at charts and place price alerts, so that afterwards you can focus on enjoying your holiday, and only need to take action when the price alerts get triggered.

Trading Strategies that Require Less Time

Once you have these things in place, you can start thinking about the actual trading.

If you are an experienced trader, you may already have a strategy that you can use while traveling.

If not, you may want to consider swing trading, or simple trend-following strategies that can be easily implemented even when you are on the go.

a) Swing Trading Strategies

Swing trading is a trading strategy that involves holding assets for a few days to a few weeks, aiming to capture medium-term price movements.

It is a form of active trading that is intermediate in nature, falling between long-term investing and day trading, so it does not require you to spend much time monitoring the markets like in day trading.

Swing traders typically look for assets that are showing strong price momentum and aim to enter trades at key support and resistance levels.

They may use technical analysis tools, such as chart patterns and indicators, to help identify potential trades.

One of the benefits of swing trading is that it allows traders to take advantage of both the uptrends and downtrends in the market.

It also gives you more trading opportunities compared to long-term investing because it doesn’t involve holding assets for several years or more.

b) Trend-following Strategies

Trend following is a trading strategy that involves buying assets that are showing an uptrend and selling assets that are showing a downtrend.

The idea behind trend following is that prices tend to trend in a particular direction over time, and by following the trend, traders can potentially profit from these price movements.

Trend followers typically use technical analysis tools, such as moving averages, to help identify trends and make trading decisions.

They may also use stop-loss orders to limit potential losses if the trend reverses.

Trend following can be a viable trading strategy for traders who are looking to take a more passive approach to trading.

It allows traders to potentially profit from both long-term and short-term trends in the market.

How to Find Good Internet while Travelling

Finding good internet while traveling can be a challenge, especially if you’re in a country or region with limited or unreliable internet access. Here are a few tips to help you find good internet while traveling:

  1. Research ahead of time: Before you leave, research the internet access and connectivity in the places you’ll be visiting. Look for reviews or ask locals for recommendations.
  2. Use a SIM card: Many countries offer prepaid SIM cards with data plans that you can use on your phone or tablet. This can be a convenient and cost-effective way to stay connected.
  3. Consider using a personal hotspot: A personal hotspot is a small device that creates a wireless internet connection for your devices. You can use it with a SIM card or connect it to a wired internet connection.
  4. Look for wifi hotspots: Many restaurants, cafes, and other public places offer free wifi for customers. Look for these hotspots and connect to them when you can.
  5. Use a VPN: As mentioned above, a virtual private network (VPN) encrypts your internet connection and can help you access websites that might be blocked in the country you’re visiting.

By following these tips, you should be able to find good internet while traveling and stay connected while on the go.

Concluding Thoughts

Overall, trading while travelling requires careful planning and the use of tools and strategies to help manage risk and stay connected to the market.

By following the tips above, you can continue to trade effectively while on the go.

Now that I have shared all about trading while travelling, is this something that you would consider trying out?

Which is your favourite trading/travelling tip, and do you have any of your own to share?

Let me know in the comments below.

 

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