At some point, most people will have paused to consider ways to earn extra money. This might be because you want a simpler life, more time with the family, or simply want to earn more money. Whatever the reason, there are plenty of opportunities to earn extra funds online.
However, online trading is one subject that most people skip. The reason is obvious, it seems time-consuming, complicated, and risky. The truth is that it is! But, you can learn the secrets to successfully trading online.
All you need is a little patience and knowledge.
The Right Platform
Today, it is possible to start online trading with little more than a computer. All you need to do is create an account with a broker and log in. You are then free to investigate the opportunities and choose between the different market options.
Many new traders start out forex trading because it gained a lot of fame in recent years. But, with the right platform, you can buy and sell a wide range of financial instruments with one click.
The secret to finding the right platform is to choose one that gives you helpful hints, online training and allows you easy access to an array of financial instruments. Of course, low or zero commission rates are also a welcome option.
First-time and experienced online traders should take a look at several platforms to establish the one that suits them the best. While every trader is different, it is worth taking a look at Fineco and take the first step in your online trading journey.
Follow Trends
You may dream of bucking the trend and making a killing. However, it’s called the trend for a reason. The best traders will usually follow the trend because that’s what the market is doing and that’s the best way of making a profit.
For example, if you’re trading in a bear market then you need to pick stocks that are likely to decline in value, the same as everyone else will be doing. Equally, a bull market means finding shares that are likely to rise. If you’re investing in the same shares as everyone else then there’s a good chance you’ll all be making money.
To buck the trend you need to know the stock market extremely well and be confident you are reading it better than your colleagues.
Funding
Before you start online trading consider what you can afford to lose. The first rule of online trading is never invest money that you can’t afford to lose. In other words, do not invest your rent.
You need to have spare funds that would be upsetting if you lost them but wouldn’t affect your ability to pay your bills. Trading is risky and losses happen.
Alongside trading with spare money, you should spread the risk, especially when you’re new to online trading. This may mean investing in ETFs where you spread the risk across several shares rather than putting all your confidence in one share.
Additionally, you should ensure that you have a reserve fund. This will allow you to continue trading and learn from your initial mistakes.
Start Small
Unless you’ve had training in the financial markets there is no shame in starting small. There are many different share options and financial instruments to choose from. It can be baffling to follow them all and work out which is about to perform well, or badly.
That’s why it’s always best to start small and invest cautiously, allowing yourself to get a feel for the market before you get serious.
Pause In The Morning
Many traders have been investigating trends and shares throughout the night ready to trade first thing in the morning. That’s why there tends to be a surge in trading first thing. However, it is worth pausing before you place your first trade of the day. This will give you the opportunity to look at what other traders are doing by checking out the trends.
This can tell you whether to invest or not. While investing slightly later can reduce your returns, it can also prevent you from investing and reduce your losses. Remember, you’re not in competition with all the other traders, you’re in this to generate a good return for your investment.
Know The Terms
There are many different terms you need to understand, such as bull markets, bear markets, intraday trading, and so on. Take the time to check out what each term means before you make your first move. It will help to ensure your first move is a good one.
It’s a Business
You may only have the time to trade for a few hours each week. That’s fine but you must still adopt the right approach. That means treating your trading as a business, not a hobby.
In other words, take it seriously, focus on the shares, their movements, and company announcements when you are trading online. This will help to ensure you choose your investments wisely and generate additional funds.
The more time you can spend learning about the markets and following different financial instruments the easier you will find it to choose the right investment vehicles. It’s worth putting a little time aside for this.
Final Thoughts
Online trading can be done by anyone, especially when you use a quality platform. However, that doesn’t mean online trading is for everyone.
You need discipline to follow the market, consistency to ensure you are always aware of what is going on in your chosen area, and plenty of perseverance. It is unlikely that you will choose the right investment first time and become a millionaire overnight. In fact, thinking that you will make a quick fortune is almost certain to prevent you from successfully trading online.
But, if you are prepared to put a little effort in and develop your own strategy, you will find that online trading is very rewarding, emotionally as well as financially.