Any individual who has traded online understands its numerous benefits.
Online trading provides a decent earning with flexible working hours and the advantage of working from home or anywhere else.
However, online trade is never a cakewalk for beginners. It takes time to understand the market and gather enough knowledge and experience to avoid risks of losing money.
Fortunately, traders, these days can use advanced technology in trading which increases their winning chances, but it is important to be aware of frauds and scams as well.
Thus, choosing a trustworthy broker like IQ Option is immensely important. IQ Option is a robust trading platform which executes more than 1,800,000 trade daily.
It is just perfect for beginners, especially because of its functional demo account. Beginners have the scope of using all features available in a real money account in this demo account, which makes learning easier.
Types of Trading
A beginner needs to be aware of different types of trading options:
- Options trading: In options trading, traders can trade contracts. It offers them the right to buy or sell underlying assets at predetermined prices, but they are not obligated to do it.
- Binary options trading: The result of binary options trading depends on the prediction of the traders on a certain market event. If the prediction is successful, then they can earn a predetermined payout. If not, then they get nothing.
- Forex trading: In Forex trading, traders buy or sell currencies to make profits. The profit comes from the difference in the value of currencies, as set by the global economic landscape. It is also known as currency trading or FX trading.
- Stock trading: Stock trading allows the traders to buy, hold or sell stocks or shares of securities that are listed on public stock exchanges.
How To Start Trading – The First Step
After you grasp the basics of the market, choose the assets you want to trade. Then, you need to select the right broker to access the market.
The broker must have direct influence over the asset you have chosen, your trading tools, the amount of money for investment and the final return of investment.
Beware of the brokers who offer a complicated and confusing trading process. They might steal your money in the name of transaction costs and fees.
So, go for a broker like IQ Option that will make your trading experience easy without robbing your money at every chance.
The Importance of A Trading Strategy
You need to understand that earning profits in trading depends on the market movements. So, you need a concrete trading plan and a trading strategy to back-it up.
A trading strategy must include a market ideology. First, set a specific goal that will act as a motivational factor for you. Apart from this, remember to include asset allocation and diversification moves in your trading strategy.
You should also consider risk limits, which represent the amount you can afford to lose in a trade. Lastly, mix your strategy with fundamental analysis and technical analysis.
How Technology Can Help
As mentioned before the use of advanced technology plays a key role in successful trading, such as:
- Trading bots: Trading bots are computer programs that can execute your trades automatically when you are not present. You can use them to trade foreign exchange products, stocks and options. The predefined set of rules of bots determine the time of entering and exiting the trade and help you make the best decisions for earning maximum profits.
- Stock screeners: Traders who trade stocks often find it difficult to pick the right stocks among so many available options. With a stock screener, however, you can narrow down the potential stocks by identifying top gainers and losers.
- Trading algorithms: Algorithmic trading is a tool that can help you in executing orders automatically according to pre-programmed trading instructions like timing, price, and volume. It can also be used to break down large orders that cannot be executed in a trade.
Lastly, do not make some common mistakes which most beginners make like changing strategies after each trade or underestimating a trading journal.
Go ahead and log in to your favourite broker platform IQ Option which is great for beginners and start trading with all the advantages it offers such as a free demo account, minimum investment of $1 only and a minimum deposit of $10 only.