The appeal of financial trading is easy to see. With interest rates on savings accounts plunging, and even ISAs offering fewer benefits than they once did, investing your money in the financial markets can seem like an ideal way to make it go further. However, while trading can be a great side hustle alongside your regular income, many people who have considered getting into trading have also been put off because they don’t know where, or how, to begin. But don’t fret, we’ll discuss what you need to know about financial trading in this article, and whilst you’re at it, you can have a look at how to trade the global financial markets using the bitcoin prime app.
Managing risk
Your first lesson in financial trading should involve understanding the risks. It’s important to know that there are risks involved, and that there is always a chance that you could lose your money rather than see a profit. However, these risks can be managed through understanding how the market works, and through basing your investment decisions on a solid base of information and analysis.
When people are dissuaded from taking up financial trading, it’s usually through fear. They worry that trading is too complex for them to understand, and also that it’s too risky and that they will end up losing money. In fact, these two factors are interlinked. Trading can be complicated, but there are ways to learn how it’s done – and the more you learn, the lower the chance of you losing money.
The right approach for you
Going in without a healthy sense of risk can be just as bad as overestimating it. Understand the risks, and then decide on your own risk tolerance. If you would prefer to make low-risk investments that will never make a spectacular profit but should gain steadily in value over the years, this can be done. Equally, if you’re prepared to gamble for high stakes and risk big or frequent losses in return for the chance of a big score, this can also be achieved. Decide which approach is right for you, and proceed accordingly.
Do your homework
There are many places that you can learn about financial trading, both online and off. Read widely: books, magazines, newspapers and website articles are all there to help you. According to Bitcoin Era, there are also video tutorials and podcasts on the subject, often featuring invaluable tips from expert traders. Be sure to brush up on different aspects of trading, such as forex education, as well as familiarising yourself with CFDs, binary options, cryptocurrency and so on. This will help you to decide which areas of trading are right for you.
Choose your broker
There are many online brokers out there, and it’s worth shopping around to find the one that best meets your needs and expectations. Some specialise in particular markets, which could be useful if that’s what you’re interested in. Many have a number of extra features, some of which are geared towards helping the beginner, while others are aimed more at experienced traders.
Look for a site that provides a decent number of educational features, such as access to articles, tutorials and expert advice. You should also pick a broker that offers a free demo account. This will be invaluable when it comes to learning how to trade without risking actual money. The next step up could be copy trading, which lets you follow the trades of experienced traders and even make money while you learn. This isn’t for everyone, but it can help you see how the experts make their money, and you can pick up a few tips along the way.
Feel comfortable
Familiarise yourself with the platform you’re going to be using and follow the global markets from afar until you start to feel like an insider. New sites such as Yahoo Finance should be your second home, and publications such as the Financial Times and the Wall Street Journal should be your daily morning read.
Keep up with overnight price changes and learn how to analyse movements through charts and graphics. Take advantage of the free tools available to help you do this. Soon, you’ll be thinking and feeling like a pro, and this confidence will stand you in good stead once you start trading for real.
Just do it
Ultimately, there’s no better way to learn trading than by doing it. Start small, and don’t invest more than you can afford to lose. See those losses as learning opportunities, and don’t be discouraged. Build up a balanced portfolio of assets with steady, low-risk investments to balance out the higher-risk (but potentially more profitable) ones. Invest across different sectors and asset classes. Most of all, learn to enjoy the game. Hopefully, you’ll make money, but a true trader enjoys the process as well.
