Thanks totheinternetand better connectivity you can now trade from the comfort of your own home. Online trading has caughton for this very reason. You do not have to go the bank or the post office totrade in foreign currencies or any major commodities like gold; why even trading in major market indices can be down from your mobile phone.It is really simple to open an online account and start trading online on any product for any amount. If you are a first timer, then there are few things that you must know before you venture into this pulsating field of trading.Investing online is a tricky proposition for the most seasoned trader out there, which necessitates the need to pay heed to these fivepoints to reduce guesswork and start trading.
1.Do not put all your eggs in one basket:
The first and most important advice any investment consultant would give you is to diversify your investments or you will be exposed to concentration risk.What is Concentration risk?It simply means that when you invest solely in a particular commodity, market, region, industry or stock the risk of loss is so high that your overall portfolio weakens and it might leave your coffers empty.You can overcome this risk by investing in various markets and stock exchanges across the globe. When you are connected to equities and exchange-tradedfunds or ETFs over various stock exchanges you will end up with a more balanced portfolio and be better prepared to face losses if any.
2.Homework is a must:
While the process of trading has become simpler and far more accessible to everyone, the basics of trading still remain the same. Before you start trading itis paramount that you research about the best forex trading platform that is safe and secure. It is important for you to understand the market before you make any investment decisions.
The key things that you must look for include:
Technical and fundamental information on the securities and products available
More information on stock quote tab which includes details about the company profile,stock prices, statistics like earning per share, what is the dividend yield, and other news related to the company.
3.Consolidate all the chargesinvolved:
Trading involves several charges besides the much-knownbrokerage fees. Depending on which platform you choose you will have to pay custodianfees, registration fees, foreign exchange charges, charges if you want to access real-timequotes and so on. Compare the fees and the services before you choose any trading platform. There are some trading platforms from leading banks that let you trade with zero brokerage fees and minimal to nil custodian fees.
4.What are your financing options:
The basic need for any kind of trading is access to liquid assets. You can enter or exit a trade only when your liquidity needs are met.Look for options where you can use the proceeds from trade to buy another investment instantly. Time is precious; hence look for the least to no waiting time options.
5.Don’t forget to use the smart tools:
Astock marketis a volatile place that can see huge rises and falls based on events around the globe. It is hard to predict accurately how stocks will perform. Therefore, the best way to stay safe and minimize losses and protect your profits is to use the tools on the online trading platform. For example, the stop Loss Order option (an option on Standard Chartered online platform) is presetto sell any stock or security once a set price arrives. This tool is veryuseful for those who don’t have time to monitor the market, especially one with sharp price rises and falls.There are other tools like that can be preset so that you are not entering your order each day. Basically, analyze the tools available and understand how they can suit your strategies and method of trading along with your finances. Go through the FAQs on the website and reach out to the help or support on the platform for any clarification before you start trading.
A smart traderis not one who just knows to read the market but one who knows how to use this knowledge in a beneficial manner and knows how to overcome losses.