A Beginner’s Guide to Trading Online Like a Pro
There was a time when Wall Street, NYC was the first and last place any big trader went to deal in stocks, bonds and other commodities. Now, it has become far easier and more affordable to trade online, whether youâre an experienced broker or entirely new to the world of trading. You can even buy and sell stocks yourself without having to get anyone else involved, or you go the opposite way and entrust an experienced online company to help you do your deals. Either way, if youâre new to the trading game youâll want to know the tools of the trade, how it all works and how you can stay ahead of the market.
Learn the Basics
As with anything in the world of business, you absolutely must know the ins and outs before getting too involved. When it comes to online trading, youâll need to knowÂ how the stock market works. Put simply, it functions based on supply and demand, so you want to be looking at stocks that other traders will have an increased interest in at some point in the future. As your stocks become more popular, traders will compete for a share and thus the value of your stocks will rise. Of course, this is a very basic overview of how it all works but as stock value can change for a number of reasons, but the goal remains the same.
Do Your Research
To ensure you buy the right stocks that will gain more value over time, itâs crucial to do your research. One method you can use isÂ fundamental analysis, which takes each individual companyâs financial history and relationship with the public into account. By looking at income statements, earnings, public statements, news and a number of other factors into account, you can at least attempt to predict a companyâs future. If that future looks bright, you may want to invest.
Another way to research stocks is to give technical analysis a go. Traders using this method believe that there are patterns to stocks which traders can use to predict whether certain stocks will be successful and when. As thereâs little evidence to support the validity of this method though, it is usually used in tandem with fundamental analysis. Regardless of which method you choose, make sure you know everything about the company, its finances, its competition and the publicâs general opinion on it before investing.
Choose Your Online Trader
Now that you know which companyâs stocks youâre interested in buying and selling, you need an online trading service. You should look at an online trading service as a brokerage partner and choose very carefully. Just like the stocks youâll want to do as much research as possible before settling, including comparing prices, services on offer, investment portfolios and resources.Â
Of course, since trading will take place online, security and reliability are also hugely important. For newcomers just entering the online trading arena, it is probably best to go with a highly regarded company like SAXO, a trading service thatâs operated for over 20 years. Not only do they offer a wide variety of trading options from simple stock exchanges toÂ CFD trading, but they are also incredibly secure and have plenty of support staff. More experienced traders looking for a niche market already know where to go, but we all should start safe.
Once youâre all set up, weâre afraid itâs up to you. As with any new venture, practice makes perfect and so you should dedicate plenty of time and energy to hone your online trading skills. Chances are you will experience pitfalls along the way, but no one ever said that online trading was easy.Â