Which is the best type of trading for a person with low capital and little time?
This question is both interesting and difficult to answer because trading is such a personal issue. By this, I mean it is personality oriented. For example, how well do you handle risking your money? Are you risk averse, or are you a gambler? Are you an emotional person? How will you react when your trade suddenly reverses and your profit diminishes or disappears? How will you respond when your market gaps up or down at the opening and you are on the wrong side of the gap? What will you do with your next trade if your last trade produced an ROI of 25%? Will you jump in thinking that every trade will give you such a massive return? Do you want action, or are you willing to sit on a trade for two weeks or more?
I could go on, but I think you get the point. Trading is about you, as much as it is about the markets. Okay, having said this, I will address the interesting part of the question.
This question is interesting because it opens the door to one of the most fascinating aspects of the trading world – variety. You can trade just about anything on the planet, and you can trade whatever in a variety of ways. This, then, presents an opportunity for you – find what interests you and learn all about it. For example, do you enjoy following international news? Are you up on the financial picture of the Euro Zone? If so, consider forex. This market is the most liquid in the world, and, if you work during the day when most of the trading is generally done, be assured there is time for you to “play” as the forex market is open virtually 24/7.
Perhaps you are truly a risk taker and action oriented. If so, futures and options could be your thing. Then again, if you are inclined toward researching, watching, and waiting swing trading equities just might suit you. You see, only you can answer your question because you know who you are. My advice is find what interests you first, and then learn as much as you can about that area. Once you feel you know it well, jump in an exploit it.
As to the low-capital issue … This might not be bad, especially if you are learning. Low capital forces you to be more careful, more selective, and generally more interested in getting it right, rather than scoring a “big bagger.” If you are good at trading and patient, you can build your trading “stash” slowly over time, gradually “kicking it up a notch” as you become more skilled.
As to the time issue … As mentioned, forex is open for trading 24/7, so you can fit it into your schedule; however, actual trading time is, arguably, the least amount of time one needs for trading. For example, in my case, I spend far more time researching, studying, and analyzing than I actually do trading. In fact, I spend many days watching and studying the market without making any trade at all. In my opinion, this is the way it has to be if you want trading to be more than a parlor game; that is, if you actually want to make money at it.
Trade in the day; invest in your life …
