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5 tips that will allow you to bring your trade on stocks to a higher level
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5 tips that will allow you to bring your trade on stocks to a higher level

created Paweł Mosionek14 May 2018

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It's been 9 years since the world's largest stock markets started their bull market. Today, the emotions associated with achieving record highs are changing into the fear of a market decline which may be seen as reluctance to enter the stock market at such high rates.

What does this mean for you as an investor?

Now, more than in previous years, it is crucial to have the right tools to be able to react to any market situation.

For this reason, we have prepared 5 tips for you so that you can invest on an even higher level in LYNX.

Tip # 1: Use the right instruments - Consider the breadth of markets and products

Consider the breadth of markets and products available for your trade. Access only to Polish shares, limited number of foreign shares and even CFDs can serve well in times of a one-way bull market, but in times like these now, such an offer can significantly reduce you.

When you think the stock price is too high to enter the market, you can use trade in options to secure your positions. Such insurance guarantees that your positions are secured for every market situation. The options also allow you to use virtually any market scenario - consolidation, increased volatility, etc.

Having options for trading in options allows you to:

  • Increase long-term portfolio profits by selling options,
  • Protection of the portfolio against all losses,
  • Buying shares for your wallet at a discount,
  • Speculation for every possible market situation.

Not only options give your portfolio an advantage, in addition to options you can also trade through ETFs from EU, in LYNX,  which offer very similar instruments like ETFs from the USA only under other tickers.

At a time when you are expecting a crash / drop in the markets, you need to be sure that you will be able to shorts (short selling). Thanks to LYNX, you have the option of short selling on all instruments in very favorable conditions.

If you are a long-term investor with a portfolio of shares, LYNX also gives you the opportunity to increase profits thanks to the Stock Yield Enhancement Program. When you agree to join the Program,  your long-term shares held by you will be available to short sellers who will pay you part of the interest for borrowing shares. Thanks to this you can earn extra money!

2 tip: Get wide access to trade before opening and after closing the market (premarket, aftermarket)

A significant number of bad and very bad news is published after the market closes. In this way, markets do not immediately get shocked and have time to digest the message.

For you, as an investor who does not have wide access to trade before and after the market is closed, it means you can stay watching how the value of your shares or other instruments falls (probably even below the stop-loss level) before the market opens . When you open the market, you start to realize your losses, needless to say that they can be bigger than you expected. 

LYNX offers many possibilities of effective operation on the market even before its opening and after its closure. This allows you to very effectively increase profits and reduce losses.

You can trade stocks on the US market from 10:00, i.e. before the market opens - 15:30. The Aftermarket allows you to trade after the US market close from 22:00 PM to 2:00 AM. This gives you a strong advantage not only in reaction to market downturns overnight, but also in generating additional profits.

Thanks to LYNX, you can trade on shares, options, ETFs, futures, forex contracts and on many other instruments on 100 global markets 24 hours per day. When EU or US markets are closed, you can trade in Asian or Australian markets.

3 tip: Lower the total investment cost

Not only commissions can save you money. Especially investors who focus on ETF shares and funds can enjoy significant savings thanks to LYNX due to the possibility of exchanging their funds at interbank rates.

These advantageous exchange rates allow the exchange of e.g. PLN into EUR or USD with a bid-ask spread of about 3 pips.

lynx spread

In the case of the exchange of, for example, 10 000 PLN into USD, the cost of the spread is only 3 PLN.

Thanks to LYNX, you can very effectively manage the currency risk of your portfolio. You convert currencies thanks to favorable exchange conditions in LYNX for all transactions, at the same time taking risks related to exchange rate changes or you can use a currency loan. In this way, you can save funds in your home currency (for example PLN) and you can borrow funds in other currencies in which you want to trade (for example, borrow USD to buy US shares). In this situation, you are not exposed to currency risk and you pay only low interest on the borrowed amount.

Currency management costs are often an even greater burden on the profitability of your portfolio than commissions on trade. With that in mind, you can significantly increase your real profits.

In LYNX, in addition to the low cost of currency management, you can benefit from low commissions on transactions and low interest costs, as well as the lack of hidden costs of account maintenance.

Intra-day traders can also save money thanks to state-of-the-art SMART routing order execution. Thanks to this, the system sends your order not only to one exchange, but to all exchanges where the given instrument is traded. SMART routing carries out your trades at the best prices available at any time.

lynx broker

4 tip: Get direct market access, watch out for market makers

Do you remember the fallen brokers after the sharp appreciation of the Swiss franc in January 2015 year? CFD brokers operating on the market are very seriously exposed to the risk of rapid market changes.

The above fact and the possibility of combining the funds in the broker accounts together with the money of other clients gives a certain prediction of what may happen if something goes wrong. In extreme cases, you can never see your money again.

To prevent this, you can only focus on products traded on the stock exchange, such as shares, options, futures, ETFs, etc., and limit trading on derivatives such as CFDs for shares, forex, commodities.

At LYNX, you gain direct market access to more than 100 global markets, so you can trade stock products, not just derivatives of these products.

In addition, your funds are divided into individual accounts that are not linked to broker accounts or other clients.

LYNX provides the highest level of security for your account. 

It is human nature to judge these scenarios as a low probability, so people do not concentrate on them enough. Preparing for each scenario ensures a good night's sleep.

Tip 5: Learn from the best

When you think markets are too high, this does not mean that there is no investment opportunity.

To help you expand this knowledge, we have prepared a unique e-book with a detailed description of the strategy of the most-known investment gurus such as Warren Buffett, Peter Lynch, Benjamin Graham, etc. E-book also gives clear ideas on how to implement the strategy for your portfolio.

Remember that we chose 11 gurus who proved their effectiveness in several market cycles.

You can now download the free ebook 11 Proven strategies, the largest investment gurus clicking on the link https://www.lynxbroker.pl/guru-ebook/

lynx ebook

O LYNX:

LYNX is currently one of the largest and fastest growing internet brokers in Europe and operates in 9 countries.

LYNX has received the 13 award for the best trading broker in many European countries, such as Germany, the Netherlands and the Czech Republic.

The LYNX company was founded in the Netherlands in the 2006 year. After success in the Netherlands, LYNX opened offices in Germany and Belgium in the 2008 year. In 2013, LYNX began operations in the Czech Republic, Finland (2014), France (2015), Slovakia (2016) and in 2017 in Switzerland and Poland.

lynx

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About the Author
Paweł Mosionek
An active trader on the Forex market since 2006. Editor of the Forex Nawigator portal and editor-in-chief and co-creator of the ForexClub.pl website. Speaker at the "Focus on Forex" conference at the Warsaw School of Economics, "NetVision" at the Gdańsk University of Technology and "Financial Intelligence" at the University of Gdańsk. Twice winner of "Junior Trader" - investment game for students organized by DM XTB. Addicted to travel, motorbikes and parachuting.