When you decide to trade online, you should first learn some basic steps to follow to enhance your chances on not falling into pit holes that will eat up your profits or your capital. Many investors do not take the plunge into the trading market because they feel it is too complicated and their learning of what is going on will take forever.
Remember, the quicker you learn the basics, the more you will get interested in starting your portfolio in the market and becoming your own boss. You will set your own hours, check out your investments any place you want, and your income will start building.
There are many different trading tools that you will learn to use to give you the understanding of the trading market. You will learn about bots, Al, social trading and trading algorithms to make it easier to trade and become successful. You will not need any advanced degrees or highly technical training.
Bots are automated trades which can help the beginner get in and out of trades, and help the trader from losses. Algorithms are to help traders execute automatic orders based on pre-programmed steps on price, volume and timing. Social trading is a user-generated financial report on what other traders are doing. You can follow them and hope to gain profits from their wisdom.
First let’s go over the different kinds of trading.
Stocks are called shares in which you can buy, sell or hold. They are traded on the AMEX, NYSE, or NASDAQ which are public stock exchanges.
Forex trading is the trading of currency in the global market. The FX exchange is the buying and selling of different currencies all around the world.
This is where you can buy and sell contracts at a certain price without any obligations. The price is predetermined.
Binary Options Trading
This may be a little tricky for the beginner, but interesting to learn. Binary trading is an all or nothing option. You expect to receive a certain predetermined amount based on your prediction on the outcome of the market.
Before Making Your First Trade
You will want to choose an online brokerage firm or a broker such as trades prime or trade x1 who offers you the best trading price, with the greatest amount of trading tools. The trading tools will teach you the strategies that you will need to be a great investor or trader.
The investor buys with the intention of holding for months or even years at a time. The trader will watch the movements of the market and buy and sell many different times throughout the day.
A good trading plan will keep the daily trader from making emotional buy and sell decisions. Make a goal like, making a million, retiring early or getting out of debt at a certain time. Know what your assets are and diversify. Beginners should not put more than 5 percent of their beginning capital on any one trade.
Know how much you can afford to lose. Your loss should not be over the 5 per cent of your capital. No one trade should have a loss of more than 1 per cent of the capital that you put into the trade.
Trading strategies should include what is happening around the world. If there is a war going on, the price of oil may be impacted. Volume and price will also determine your entry point, your sell point and tell you when to get out if the trade goes the wrong way. Plan your exit points by using the stop/limit loss order into every trade.
A good stock screener will help you see what stocks may be a top winner or loser. It will show you the momentum of stocks and which ones may break their resistance level or break down out of their support lines.