Online Trading is a huge field, and there are a lot of things to cover. In this article we’ll give a brief rundown of what it is and how to get started. Good news is there are and there are a lot of ways to make money. I guess this article will serve as an intro more than anything. But I’ll definitely be going into more detail on this stuff later.
Online Trading can cover a lot of things. Shares, commodities, energy (like oil, gas etc…), crypto, metals (gold, silver) and my fave, indicies. The price of these tradable assets vary and traders generally make money either by buying in at a good price and selling at a higher price or receiving dividends from stocks or assets that pay them.
In my mind theres two types of trading. Leveraged – where you used borrowed money to amplify your trading power and Non Leveraged where you own 100% of the traded asset.
NON LEVERAGED
Non Leveraged trading is the safer bet. Especially if you are new to trading. If the assets you’ve bought go down in value (which believe me, does happen) you don’t loose your holdings. You can wait till they bounce back a bit and sell them later (hopefully at a profit) but either way you have the option to sell when you see fit and not under duress.
LEVERAGED TRADING
Leveraged trading is a bit more complex. If you want to make money faster or don’t have the capital to buy your assets outright this might have to be your option if you want to trade. There is risk as your trading on margins from x2 your original deposit to up to x500 depending on how you trade. If your asset base falls in value beyond the equivalent of your deposit you basically either have to throw in more money or the asset gets sold out from under you. Withe the volatility of the markets over the last 10 years this has been a risky option.
Long story short you have to decide first up what appetite for risk you have and go from there. I believe most sites that offer leveraged trading will make you declare your experience level (usually if you declare 2 years experience and use a bit of common sense you should get through) and source of funds etc. Regulations in place now, they won’t let a newbie trade like that straight off the bat. This is what I do now. It’s risky but unfortunatley I don’t have the financial base to do non leveraged trading in a meaningful way. I’m aiming to move into Non Leveraged trading once my asset base builds up.
See also: WHY CHOOSE SHARES for further information!
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