What is trading?
Most likely, much like other people consider investing nowadays, you might think about the possibility of doing it remotely from your own personal computer too. That’s when you stumble upon the idea of trading.
Given that it offers you both, the comfort of trading from the intimacy of your home and the possibility of learning everything about trading online, and even for free, it might seem a lot more appealing. And what’s even more exciting is that these aren’t all the benefits that trading could bring you or any of the people that decide to embark on this adventure.
Continue reading and let’s see what all the fuss is about.
Here’s what Trading really is
Before you can start doing it and enjoying the perks of being an online trader, you need to fully understand what trading is and how you can do it, to maximise your shots at being profitable. And while we’re at it, we’ll also see the many tools you can use to improve your experience.
Firstly, know that trading is the activity that allows you – and every consenting adult that owns an internet-connected computer, mobile or tablet – to automatically connect and invest in multiple markets (even simultaneously), using only a certain percentage of the funds available in your trading account (or of the required margin – more on this, in the blogs to follow).
How you can trade
The logic behind trading is to sell whenever you’re expecting the asset you’re interested in investing in to drop, and buy when you consider it might increase. Just as simple as that! Before you open a transaction, it’s recommended you check the asset’s trend, and preferably what market event impacted it to follow that direction.
You should also check for any upcoming economic events that might impact your asset’s trend in the coming future, and make sure you can withstand any counter-trend in case it happens. You can also decide how large or small you want your Stop Loss and Take Profits to be, in case you’re interested in using them.
Oh, yes, trading also gives you the power to decide how much you’re willing to lose by setting a Stop Loss, should the market go against you. Just as much as you can also set up a Take Profit limit, that basically defines what is your anticipated profit, at which point you want your transaction to close (cashing in the said profit), in case the markets might change direction.
What tools you can use to trade
Since we were speaking about the advantages of trading, you should also keep in mind that every respected broker, having their traders’ best interest at heart, offers free trading tools included in the account activations.
Amongst the free tools that brokers offer, you’ll find and most likely often (if not always) use charts, Economic Calendars, Market Analysis software or threads, Indicators, and last but not least important News Bulletins. Make sure to master these tools, and you might just as well have gotten what trading is all about, and how to best approach it.
The bottom line is that although there are a lot of aspects that draw traders to choose this activity when it comes to investing their finances, and in the detriment of actually investing in the stock exchange, you need to make sure this is the right industry for you.
Before you start trading, make sure you take the time to go over eXcentral’s eBooks, Video Tutorials, Interactive Courses and Live Webinars. Or if you’re looking for a more personal trading lesson, book now a 1-on-1 session with Michalis Efthymiou, our eXceptional Market Analyst.
And whether you chose to trade for portfolio diversity this kind of investment gives you access to, the many educational materials or the flexibility it offers, one thing is for sure:
“Risk comes from not knowing what you are doing.”