CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67.30% of retail investors lose their capital when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

The film that got a whole generation trading

Although there are plenty of films and TV series about the stock market and financial markets, most of them tend to discourage trading and show its dark side. The film discussed in this article does exactly the opposite. Not only has it inspired thousands of traders to trade, but it has even highlighted a particular discipline - namely intraday trading.

Outline of the plot

How would you like to have a pill that activates the full potential of your brain and makes you remember everything you've ever read or heard? Would you go for it? The hero of the movie we're talking about today is a guy named Eddie who is broke. Nothing more, nothing less. He's lost his job, his girlfriend has left him, and he's lying on the couch all day, depressed, watching TV and eating fast food and microwave ready meals. And it's exactly him who, due to circumstance, finds a similar pill in his hands.

A huge wave of motivation sweeps over our hero and we see him start to learn foreign languages or play musical instruments and finish all his projects. But something is still missing - money. And this is exactly the moment when most traders and financial market enthusiasts watching this film take notice. After a brief flirtation with gambling and poker, Eddie's choice falls on intraday trading.
 

How Holywood sees intraday trading

Many of you will probably recognise from the text in the two paragraphs above that this is an American film called Limitless (in English, Almighty) starring Bradley Cooper. He plays Eddie, who is transformed into a stock market genius by the influence of a pill with the rather inconspicuous name of NZT 48. Soon we witness how he multiplies the original 10,000 dollars into several millions of dollars through the influence of instruments from the CFD sector of stocks, forex, indices and commodities. All this through shorting techniques. In addition to technical and fundamental analysis, he also uses psychological analysis in his trading, to which he attaches great importance.


Thanks to his great deductive skills, he is able to spot opportunities in the markets that others overlook. Over time, he develops his own trading formula. And he becomes truly almost omnipotent when it comes to trading the markets. We won't tell you how this story ends, of course, but the text at least gives you an idea of how Holywood depicts intraday trading. But where is the truth? Which elements of the film are based in reality and which are total fabrication?


Intraday trading in reality

No one will probably be surprised that the NZT 48 pill is a figment of the screenwriter's imagination, but the fantasizing ends there. Much of the detail from the world of trading corresponds to reality. The financial leverage that Eddie uses is a common part of trading on the financial markets (for example, at Purple Trading we offer leverage on Forex instruments up to 1:30) and with its help you actually have the opportunity to make higher profits than with your original deposit. However, here we need to return from the sunny world of Holywood and mention that along with profits, leverage also multiplies your potential losses. Its use is therefore the prerogative of more experienced traders, those starting out would be more cautious.

Shorting is also a real technique, i.e. betting on a fall in the price of shares or other instruments and then profiting from it. This is made possible in particular by so-called CFD (contract for difference) instruments. These are financial derivatives that are derived from the actual price of the so-called underlying asset (i.e. if you trade a CFD of Tesla shares, the underlying asset is the price of the actual physical Tesla share), so the CFD trader is only speculating on the price but is not the actual owner. Thus a BUY order is speculating on the price going up, a SELL order is speculating on the price going down. Shorting is a very interesting discipline that in the past has made speculators fabulously wealthy, but some of the more famous short speculations have shaken the world of finance to its foundations. Read this article about it.

Inventing your own business formula is also based on reality. Traders call these systems either AOS (automated trading systems) or, in a nice "Chapkovian" way, robots. At Purple Trading, we are currently running online webinars specifically focused on this type of trading. They are called Trading Room - Trading with AOS and you can watch live and free of charge how to trade on real markets using AOS. In these webinars you will learn how to turn your own strategy into a working robot, without having to swallow any pills.

The very principle of intraday trading, i.e. opening and closing trading positions within one day and sometimes even within minutes or seconds (in this case we are talking about scalping), also corresponds to reality. Although this is a more complex approach to the discipline, it is also quite popular. If you are interested in seeing what scalping and intraday trading looks like in reality and in person, we recommend you check out Trading Room - Scalping. We broadcast regularly every Thursday and participation is completely free.


Turn a dream into reality

As it happens, reality is a far cry from Hollywood productions, so there are no magic pills or other shortcuts to success in the financial markets. What does exist, however, is success, gained step by step through honest diligence and self-study. And that's exactly what we can help you with better than anyone else - in fact, the statistics on our clients' profitability will confirm this. So if you are determined to get started in financial markets trading, we are ready to provide you with everything you need as a broker!


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