Online trading means buying and selling financial securities via computer or smartphone. The goal of those who do online trading is to earn on the price difference between purchase and sale. But it’s a risky business in the sense that you can lose money. In this guide, we will give a brief overview of how to start trading online and how to try to earn. It is a guide for beginners but also for those who want to deepen.
Why is it important to study?
In order to deal with online trading profitably, you need to study, to understand how the financial markets work and to define your own action plan. And you need to know how to manage the emotion that fluctuations in stock prices can easily generate.
The psychological aspect
The psychological aspect of online trading is very important. So much so that a good operation is never defined in absolute terms but must always be adapted to the person who implements it. For some, for example, very frequent operations over a short time horizon may be suitable. For others, it may be better to operate less and take a longer-term perspective.
Why trade online?
Online trading is an inexpensive way to invest your money in the stock and ForEx market. The commissions are low and, in addition, you have access to real-time quotes and charts, technical and fundamental analysis of financial assets and much more. These are things that the investor needs to make the right investment choices at the right time. With online trading, you have everything in view instantly and in real time. We start with the premarket, the opening, closing, and even the afterhours for shares.
Most investors use the trading online to invest in stocks. Then you have access to the listing of investment funds, government bonds, CWs, etc. The working hours for investing in shares can be compared to that of a common job. Opening at 09.00 and closing at 17.30, excluding the auction market. In addition, with the afterhours, you may also work overtime.
Who is online trading suitable for?
Online trading is suitable for those who want to invest their money on their own. But to take advantage of the independence that the trading online makes possible, you have to work hard: that is, study, apply your strategy and resist market pressure. The financial markets are, in fact, very complex and above all unpredictable places. This is why you need to study a lot and above all continue to do so to define and adapt your operations to possible changes in the scenario.
The fickleness of the markets also tests the character of the trader. It’s not easy to maintain an operational program when the market says otherwise, i.e. when quotations go down instead of up. For this reason, you need the right character not to get overwhelmed by emotion and the expertise to understand when it is really necessary to change approach.
How to start trading online?
After opening an account with an online broker, downloading the platform or logging into it and learning how to use it, you need to give yourself a strategy. A strategy is made up of goals, times to achieving them and ways of operating.
But a strategy is not forever. Indeed, it is made to be improved and adapted to changes in the market, one’s own abilities and attitudes. Over time, for example, it may be decided to change the type of operation, moving from a short-term perspective to a longer-term perspective. Once you have decided on the approach, you have to put it into practice. Also because you can only earn from practice. And only in practice can one prove the technique and oneself.