Prediction Markets, like any other form of trading and investment, involve some degree of risks that you need to keenly evaluate before determining anything. Like alternatives in the financial market, prediction markets also rely heavily on the availability and right use of information and data.
A key source of reliable trading information is trading experts, authoritative voices in the market, and opinion-makers. These groups usually comprise individuals who have been in the market and interacting with Options over a large period of time. With experience on the finer details of Options trading, they are likely to have amassed a wealth of knowledge.
Many of these experts are top traders with large followings. Their opinions are influential enough to cause significant changes and movements in the market including price shifts. Getting to meet an expert and trend-setting trader may be a golden moment in your trading experience.
One advantage of relying on a prediction markets expert is access to primary information that has already been tested and proven, and you could apply it in real-time. In addition, you get to benchmark the most successful trading strategies and tips that may not be available in any other publications – print, electronic, or online.
It is for these reasons that you need proper planning for getting optimum feedback from the prediction markets expert. Be it a formal and planned meeting or interview, a questionnaire, or simply a random quick encounter, you need to maximize every moment you have with these experts as most are hard to get. Good preparation starts by asking the right questions that ensure you get the most satisfying and actionable responses. Since you may not have all the
time to ask all questions, you need to carefully select your questions, considering those that will maximize the response you obtain.
Below are five chosen questions to ask when you meet a prediction markets expert:
1. How did you get started?
This question seeks to trace the expert’s original entry point into prediction markets trading including the original motivation and the strategies applied, depending on one’s unique experience. It seeks to understand the expert’s passion for trading and how these passions marry up with what drives you to trade. There are several factors that one considers when getting into prediction markets trading. Most likely the expert will mention to you the importance of having sufficient knowledge in binary trading to minimize risk levels.
Here, you will also hear about selecting the right assets to trade, the right trading platforms to use, and the type of accounts for a beginner. This question may also offer insights into various types of prediction markets and the different ways to speculate on each.
You can also get details on the advantages of trading prediction markets, the disadvantages, and any risks involved.
2. How do you approach the trading plan?
This question should dig deeper into the strategies used to develop short- and long-term trading strategies. It is a question that seeks a detailed understanding of the strategies and insights that inform every trading decision made. The expert will take you through the steps to follow when developing a winning trading plan.
Key factors that this question seeks to cover include the motivation behind every trading plan, time commitment to each plan, the level of risk tolerance, trading goals and objectives, capital commitment, and selecting the right market.
A winning trading plan also needs to be testable, give a detailed entry and exit strategy and be able to analyze performance. The answer to this question is unique and based on the expert’s unique prediction markets trading experience.
3. How do you approach the market?
This question seeks to understand how the trader defines and approaches the market. Notably, while all traders have some similarities to how they approach the market, there are usually notable differences setting them apart.
This question seeks to understand the process of setting up trades, their perfect trading times during the day, when and where they conduct research, and the underlying intuition that informs every trading decision. Try to understand their daily trading and how they approach each trade. Asking about their approach allows you to reflect on your previous approaches, enabling you to see the mistakes you might have committed along the way.
4. How do you approach risks?
This question should seek to gauge the level of risk you can put on each trade. As indicated earlier, every market carries some level of risk, A market sans risk becomes very predictable and value generation becomes impossible. Risks are mainly born out of uncertainties in the market.
For instance, assets in the cryptocurrency market are very risky, largely due to the high volatility nature of the market. Getting to understand how the expert manages such risks and comparing their techniques to your method could help you avoid or navigate through such stomps. In addition to volatility, this question should also seek answers on how to avoid or mitigate
other risks involved in crypto trading. Common risks can be hacking and digital theft, restrictive government policies, and crypto whales who are influential individuals who can dictate market movements by their activities.
You also need to access the various risk mitigation strategies like conducting good research and diversifying your portfolio, to name a few. You also need to understand how they understand and face risks on a daily as well as per trade basis.
5. What trading technique do they value the most?
This question seeks to point out the most successful trading strategies and how they apply. A successful trading strategy is one that achieves optimal returns and presents very few risks. A successful trading strategy can be in the way they plan trading, how they approach and minimize risks, the technical analysis, and the fundamental analysis that helps minimize risks.
Additionally, a successful trading technique can entail the correct application of trading psychology and having a mindset that trades based on logic, not emotions. Finally, being a successful trader means you fall in love with the trading process and be a fan of trading.