SUMMARY

• In a highly volatile market, prices can move sharply up or down and in a short period of time
• It is considered riskier to bet on a highly volatile market as your losses could be high if the prices go against you
• If a highly volatile market moves in your favour, your gains could be higher than if you put the same money on a less volatile market
• Riskier trades have the potential to provide greater rewards, but also, greater losses
• Nobody can know for certain how the markets will move
• Never trade with money you do not have or money you cannot afford to lose
• A stop order helps minimise the amount of money you could lose on a trade. It automatically closes a trade for you when the price falls – or rises – to a certain value
• It may be less risky to spread your money on a number of trades instead of putting all your money on a single trade
• The past performance of a market/financial instrument has no bearing on its future results
• If you track a market for a while it may help you identify trends and decide how much money you are willing to risk
• Trading with play money will help you gain confidence and develop your trading style without any risks
• It is always advisable to bet with small amounts, and with money you can afford to lose if the markets do not move as you expect