So if you are thinking of online trading? Here are some tips for people who are either just dipping their toes in the water, or deciding whether to do it full-time.
Decide how much you can afford to lose
This may sound incredibly pessimistic, but to others this is just common sense. Ideally, you want to make money off your trades whether you are playing the fast turnaround or slow turnaround angle, but you need to cater for the eventuality that you may not be successful. Only invest what you can afford to lose, and then anything you do make will be a pleasant surprise.
Research what instruments you want to invest in
Do you fancy Forex or are you going to tinker with trading? You need to make sure that you do your research into what type of instrument you want to trade in. Things life Forex and CFD's can be confusing for first time traders. Straight trading in shares is probably the best entry into the market, unless you have knowledge of foreign exchange markets or CFD's that could be useful to you. Remember, if you are going to start online trading you are going to have to learn how to navigate the online trading platform, so confusing yourself with the actual investments will only frustrate you and set you back.
Do your research into online trading platforms
While there are plenty of websites and platforms that offer online trading as a stand alone business now, a lot of investment companies have also stepped up their game to compete and offer normal accounts alongside online trading. There are many things to consider when picking a platform. First and foremost, you need to make sure you can use your platform to even trade your chosen instrument. If you have your mind set on something like CFDs, shop around and find out who will give you the best rates and advantages.
It will also be worth looking at the various new customer offers. Online trading platforms are great for giving away a certain amount of free trades to entice people in, so while you are still figuring it all out, sign up for a couple and see how you can make the best of these.
Another aspect people massively overlook is the ability to see the platform and use it on a mobile or tablet device. When it really comes down to it, laptops and desktops are a dying breed when it comes to interaction online. If you sign up to a trading platform that you cannot access on the go, you are likely to miss out on important trades.
Learn how to automate
As much as we would love to, we cannot be glued to our phones or our tablets 24 hours a day. Your daily life is much more and important and you simply cannot monitor your investments 24/7. Near enough all good trading platforms will give you the ability to automatically buy or sell a trade when it hits a certain price.
When you setup your account with an app, they will email you notifications, so you can see what trades have been executed. Always make sure you have sufficient funds so that you can keep your trades up to date.
Many online trading platforms have the ability to trade without real money just to have a 'practice'. Take advantage of this not only for the learning curve but also to find your own way around investments and how you can have fun. If you are doing this as a hobby, you do not want to get yourself too stressed about it, as it will cease to become enjoyable.