Are you looking for effective and applicable online trading tips?
This article is right for you. With over six years of experience in the forex market and technical analysis, I will let you in on my best trading tips for beginners.
Before that however, I want to give you something to think about! We are currently experiencing a tremendous change in our lives. Thousands of people are losing their jobs, so we can infer now that a job is not safe.
If you haven’t learned personal development and a skill, or skills, I suggest that you dedicate this quarantine time to learn them. The honest truth is that whether you accept it or not, the world is not going to be the same as we knew it.
In this post, I am going to share the tips I gathered when I learned this skill of trading and investing five years ago.
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Table of Contents
I believe this tip is the most important, especially when you are starting in this sector. You might wonder if you can make money from online trading? Yes, you can. However, it will take time and a lot of patience. If someone tells you that trading is going to make you a millionaire in less than three months, it’s a lie.
One of the benefits of trading is that you can learn it alongside your regular job or business. It is important that you have this knowledge because trading and investing do more than help you multiply your money. They help you understand how the financial system works and how our leaders have gotten us into the problems we find ourselves in today. Financial education is important. It is crucial to know how to manage your money, so we don’t get to repeat this global disaster again.
2. Choose the financial market to operate
Stock market isn’t the only financial market that exists. Other financial markets include the forex market, commodity market, option market, bond market, CFDs market, etc. Choosing the market you want to operate in will depend on your investment capital. Each financial market has its own terms, concepts, and dynamics in price movement. If your interest and your time allows you to operate in currency pairs, then focus on the forex market. To know more about this topic, my book is a great starting point.
3. Reserve money to trade or invest
It is important that you have an investment capital. I am aware that there are people who make you believe that you can open an online trading account with $100 and by using the leverage offered by the broker, you will be a millionaire. Be careful with these statements. It is impossible to create wealth with a capital of $100 even using leverage. You can start with a minimum capital of $1,000 if you want to operate in the forex market or a capital of $5,000 if you want to operate in the stock market. Also, before you operate in a real account, be sure you have been doing your homework by practicing in the demo account.
4. Learn the concepts of the chosen market
Investing in your knowledge is the best investment you can make. Knowledge is key and applying it is what will give you success. To begin, I would recommend reading books. You can start by reading my book or signing up for my newsletter. When you do so, you get my eBook for free. It will equip you with the basic knowledge about online trading. Once you have the knowledge required, you will need a broker.
5. Choose a regulated broker
A broker is an institution or people that make it possible for traders and investors to connect with the financial market that you operate in. They are the intermediaries. Every time you operate in the financial market (purchase or sale of the financial instrument of said market), the broker carries out that operation in the financial market. There are different types of brokers and it is important to know if they are regulated by Financial Industry Regulatory Authority. In my book Trading for Success, I explain this topic in detail.
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6. Practice on the demo platform
The demo platform is a tool offered by brokers for free. It’s a simulation of the financial market with current prices. The money they give you in your account is virtual money. It is essential that you use this tool when you are starting because it will help you control your emotions. The idea is that you double your trading account on the demo platform before trading with real money.
7. Elaborate a trading strategy
A trading strategy is your work tool to multiply your money. Without a proven strategy dominated by you, it is impossible for you to create wealth. It is the same as being a gardener and not having the tools to be able to till the land. A trader needs to predict the price movement of the financial instrument. Once you acquire the knowledge, you can create the strategy and adapt it to your personality and lifestyle.
8. Know where your money goes
Managing your investment money is one part of online trading usually considered unimportant. People get carried away by the idea of earning a lot in a short time that in the end they end up losing all their investment.
Remember, in trading or investing you have to grow your money little by little. This means that for every 1 dollar you invest, you will receive at least $2 from the market as a profit. This is the basic principle of risk and reward ratio. So, if your trading strategy allows you to open a trade and you want to trade $200 then by applying the ratio risk / reward, you will be gaining $400 at least. If you don’t see the opportunity to earn at least that money, do not trade at that time. The concept is very simple but in practice many traders fail. The ambition to earn more and more is what makes traders lose their accounts.
Financial education is important. It is crucial to know how to manage your money, so we don't get to repeat this global disaster again.
9. How to make money from online trading
Financial markets are not rouletting or casinos where you roll random dice that decide if the price of the financial instrument (stocks, gold, silver, currency pairs, bonds, etc.) goes up or down. The price in the financial market is key and will determine the gains or losses that you are going to make. The question that determines the price movement is very simple- the law of supply and demand.
Investors & traders move the price in the market by the decisions they take, either to buy or to sell. Also, economic factors can influence the price through news releases. However, it is important to know that the news appears after the law of demand and supply. I mean that you do not operate in the markets based on the news release. Price tends to move with intensity, affecting the operations of investors.
10. How much money can you earn?
With the proper knowledge, you can create an income from the financial market which no longer becomes a game of chance, but a game of skill.
The money you can earn depends on some factors:
- The size of your trading account
- The type of trading that you’ll operate
- The trading strategy that you’ll apply
- Knowledge and experience in a specific financial market
Of course, it is also important to know that the larger your trading account, the higher the profits. After applying the factors mentioned above, you can earn between 3% and 17% per month thanks to leverage. More experienced traders can earn much more. These figures are only informative and based on personal experience.
Conclusion:
The previous steps will give you a structured approach to trading and will help you to have a more refined and global vision of this skill. Trading, like any other skill, requires constant practice at first, observing the market and familiarizing yourself with the movements that the price makes for each financial instrument that you are operating. If you focus on learning and taking small steps in the beginning, you will create better results at the end.
If you are really interested in online trading, then my book Trading for Success will give you a global idea explained with examples and exercises.
I hope this article helped you to have a better understanding about online trading, please share the article if you know somebody who can benefit from it.
If you enjoyed this article on “#10 Online Trading Tips For Beginners in 2021″ or have any questions for me, please feel free to leave them in the comment section below!
Recommended Resources: If you’re interested in learning more about online trading, check out my book: Trading for Success and take a deep dive into my blog.
4 thoughts on “10 Online Trading Tips for beginners in 2021”
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Exactly! The best way to go about this is by discovering which method will match your personality and interest.
Exactly! not everyone is suitable for trading but investing is another option.
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