Learn how to become a successful online trader – trading tips for beginners
Online trading can be an incredibly lucrative business and it’s never too late to get started. Thanks to freely available education, innovative tools and platforms that allow you to trade currencies, stocks, commodities or even cryptos, you can achieve profitability easier than ever before.
First of all, let’s get the logistics out of the way. While the whole process to getting started – from registration to executing your first trade – is technically quite easy and straightforward, there are some basic requirements that you need to consider before starting out.
- Starting capital. Your mileage may vary depending on the broker you register, but you need some money to invest and trade with. CMTrading accounts, for example can be activated with just $250. The good rule of thumb is to never invest money that you can’t afford to lose.
- Time. While online trading is quite efficient and can be adjusted to suit your schedule, you will still need to invest some of your time to learn how the markets work and what strategies align with your trading style and goals. Education is key in online trading and a sure-fire way to achieve to consistent profitability in the long-term.
- Patience and discipline. The financial markets are volatile, which means that prices can fluctuate rapidly throughout the day. A trader’s goal is to open positions in the directions the market is moving toward, but sometimes things won’t work out in your favor. Therefore, you need the patience to adhere to the rules of a trading plan and the discipline to cut your losses short if need be.
Is online trading worth the risk?
If you are wondering if trading online is worth the risk of losing your investment, then you are on the right track. You should always be weighing the risk and reward of any endeavour and if you apply this mindset to all your trades as well, you are more likely to succeed in the long-term.
However, it’s important to note that the unique advantages offered by online trading is why currency trading or forex trading has become one of the most profitable and widely traded market in the world.
More than $6.6 trillion are traded daily in forex alone and such a massive liquidity pool translates to better prices i.e. more affordable trading costs and more opportunities for retail traders.
Also, there are several tools at your disposal to mitigate risks such as stop-loss parameters that can automatically close your positions in case losses exceed a predetermined amount. Another popular strategy to diversify risk exposure is by investing in a number of different assets such as stocks and commodities. CMTrading offers more than 150 tradable assets that you can include in your trading portfolio at any time.
In addition, CMTrading also offers negative balance protection which means you will never lose more than your initial investment. This is important because if you trade on leverage, you only need to cover only a fraction of the total cost of a position and if you overleverage you may lose more than you initially invested.
Therefore, it’s true that online trading can be quite risky especially for beginner investors, however, there are ways to mitigate potential risks simply by using the tools available in the platform itself.
Practice makes perfect
Perhaps the greatest advantage of online trading is that you don’t even need to invest any money in order to practice. You can open a demo CMTrading account and practice trading the markets with virtual money until you are more confident in your abilities or even until you are certain your strategy is profitable.
You can open as many demo accounts as you wish through your secure client area and only transition to a real trading account when you are ready to try your hand in the live markets.
For all intents and purposes, the demo account simulates the live market and is an incredibly useful tool to develop your skills as a trader and it can also help show you how the markets react to certain events.
Utilizing a demo account can be invaluable since it allows you to test out different strategies on different assets. If you are interested in learning more about the fundamentals of online trading as well as the most successful trading strategies, you can always take part in one of CMTrading’s live webinars which take place every week.
Try social trading
If you are after a more passive investment experience, or online trading turns out to be harder that you initially thought, you can always turn to social trading or copytrading.
As the name suggests, social trading or copytrading allow traders to copy their trades directly in their account for a small fee. Therefore, you can just choose to copy a number of successful traders and enjoy a passive income stream through online trading without doing any of the work yourself.
CMTrading clients get access to the CopyKat trading platform that you can use to keep watch on experienced traders and their profitability metrics before deciding which is the best for you to start copying.
Discover more opportunities with CMTrading
CMTrading offers more than 150 tradable assets including the top-performing currency pairs, stocks and commodities available in the markets. CMTrading clients get access to global brands, exceptional trading conditions and robust safety and security under the auspices of the Financial Sector Conduct Authority (FSCA) in South Africa.
Being a retail brokerage that specializes in CFDs (Contracts for Difference), CMTrading provides clients with unique advantages such as powerful leverage, which allows traders with smaller accounts to gain exposure to much larger positions. This translates to substantially higher profit potential, however, it should be noted that leverage also increases your exposure to downside risk.
While leverage typically adds a certain degree of risk to any investment, CMTrading also offers negative balance protection, thereby guaranteeing that potential losses will never exceed your invested capital.
If you are interested in learning more about how you can take advantage of price movements in currency exchange rates, commodities or cryptocurrencies, you will find that CMTrading’s unique offering of innovative services and diverse account types are suitable for both beginner and experienced traders.
Trading tips for beginners
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