You’ve probably seen countless adverts or articles talking about trading and how it’s a genius way of making more money. While it can definitely help you make more cash, there is a lot to learn before you start trading. Some of you might not have a full understanding of what it is and how you do it, so your journey can begin here.
As always, this is not financial advice, merely an opinion with some tips on how to get into trading as a beginner!
What is trading?
Firstly, you need to understand what trading actually is. In short, it is a form of investing that gets you to buy and sell things quite quickly. The whole point of trading is that you’re not holding onto your investments for that long; you buy them when they’re low, then sell them when they get more valuable. As such, it’s a more active form of investing, rather than owning assets and sitting on them for decades as they grow.
What can you trade?
You can trade any number of things if you start looking at the available options. Typically, the following markets are seen as the most popular to start trading in:
- Contract for Difference (CFD)
All of these things have one thing in common; they contain assets that fluctuate in value very quickly. That is the key when it comes to making money from trading, you want to buy low and sell high, therefore you need assets that can drop down, be bought, then sold for a profit when they’re up again. In some cases, this can be done within a few hours – or it can take a few days to see your assets be worth selling.
How should you start trading?
Well, it begins by selecting the market you want to trade. From here, you can register for an account on a trusted trading platform. Many exist in today’s world, including Plus500, eToro, IRESS, and so on. Some platforms only cater to specific markets, so be sure you choose one that aligns with the markets you want to trade.
Next, you need to educate yourself on everything. Learn about the best assets to trade within your market, understand when to buy and sell, etc. Without an understanding of how to trade, you will never be able to make money. A good idea is to work with a broker that can help you make your trades. The downside is that you pay them a fee, but the upside is they do all the work for you. They watch the market, identify when you should buy or sell, then tell you what to do. Effectively, it’s like having a guide explain what you should do and when you should do it.
Trading is definitely a good way to earn more money and make your finances do more for themselves. Begin by learning about the different markets and what you can trade. Find an ideal platform with minimal fees, then start trading – either with a broker or without.