A Starter Guide to Stock Trading

Posted on April 21, 2022 by James Paul

Investing may seem like a hassle at first, but understanding the basics of the stock market for dummies can help you get around it. Understanding some concepts will help you grasp the whole of the stock market easily, like the workings of the stock market, the difference between long-term investing and stock trading, and why it is important that you diversify your portfolio.

This guide to stock markets for dummies aims to explain all the basic stock market concepts and give you a solid investing foundation to build upon. The first thing you need is a licensed brokerage that will make trades on your behalf.

Not understanding the stock market basics can make all the stock trading seem gibberish. “Earning moves” and “intraday highs” are jargon with not much importance to an average investor. If you aim to go along with your investments, then there is no need to know them or worry about the red or green flashes on the TV screen.

But if you want to learn to trade stocks, you will have to learn about the stock market and also the basics of how it works.

The Stock market

The stock market is a mixture of a swap meet, auction houses, and shopping malls.

The stock market in terms of a flea market:

It comprises individual and institutional investors such as hedge funds, pension plans, and investment banks, buying and selling items like the public companies listed on stock exchanges. The prominent stock exchanges are New York Stock Exchange (NYSE), Nasdaq Exchange, and OTC Markets. Every exchange has different listing requirements for companies looking to use their services to raise capital from investors.

The stock market, in terms of an auction house.

The auction-like pricing system of the stock market makes it appear like an auction house. There is no set price for each item; the prices frequently change with buyers and sellers trying to reach a market price for a company’s stock. In addition, various factors impact stock prices; it can be internal, like the company’s earnings and growth prospects, and external, like upcoming elections.

The stock market in terms of a shopping mall:

The stock market is a one-stop-shop. It is a place for all publicly listed companies, where all the investors buy and sell any publicly traded stock they wish to. Stock market exchanges act as primary and secondary markets for a company’s stock. In addition, they enable companies to sell shares directly through the initial public offerings (IPO) to raise funds and expand businesses.

Companies can carry out numerous secondary offerings of their stock when looking to raise additional funding if investors are willing to buy. In the meantime, exchanges provide investors liquidity since they can sell shares among themselves.

The stock market concepts

The stock market moves higher over time but not in a straight line, and so there are various terms coined to describe the big swings in stock markets:

Bull markets

When the market index gains more than 20% from a recent bear market, it is a bull market. These markets are often multi-year events driven by economic expansion.

Bear markets

A bear market is when there is a drop of more than 20%.

Corrections

A stock market correction is when there is a 10% to 20% decline in a major market index like the S&P 500.

Crashes

A sharp drop in the major market indexes over a short period is a stock market crash.

Volatility

Stock market prices fluctuating sharply is stock market volatility. Usually, the stock prices grow gradually as companies expand operations and earnings with economic growth, making the underlying businesses more valuable. The average stock market return has increased more than 10% each year as measured by the S&P 500 Index (a collection of the 500 largest US-listed publicly traded stocks. But it is not less down periods.

The 1929 stock market crash was the worst market crash on record at the onset of the Great Depression. Economic recession can lead to stock market sell-offs, although that is not the sole factor that can lead to a big market slump.

Stock market corrections are often challenging for beginners, but they are usually short-lived. Most stock market corrections of the last 50 years did not last more than three months.

Long-term investing vs. Stock trading

Some stocks deliver significant gains in shorter periods; these are outliers and not the norm. Beginners should hence not get involved in stock trading or actively buying and selling stocks, mostly day trading, and put their energy and money on long-term buy-and-hold investing.

Buy and Hold

An investor should conventionally buy stocks and hold them for three to five years at the very least.

With long-term investing, there is,

A higher probability of positive returns
A lesser chance of missing out on bigger gains
Benefit from compound interest
Saving on taxes

Holding stocks for the long term generally yields the best returns; it is also critical to understand when to sell. One of the reasons is when the reason you bought no longer applies. Others can be that the company is acquiring, you are thinking of rebalancing your portfolio, or you require the cash to make a big purchase.

Portfolio Diversification

Understanding the benefits of a diversified portfolio will help you minimize your losses. Diversifying means buying a diverse group of stocks across different stock market sectors. You cut your risk of a permanent loss and the portfolio’s overall volatility by diversifying. But keep in mind that the returns from a diversified portfolio are usually lower than what an investor earns upon picking a single winning stock.

Why Diversify?

A diversified portfolio of stocks cushions the blow during a correction or bear market, so investors do not suffer from irreversible loss of capital. But over-diversifying can prove to be a problem for an active investor since holding too many stocks reduces returns with minimal incremental benefit from a reduction in losses or volatility. Moreover, when a portfolio has more than 100 stocks, it is hard to manage. Furthermore, it would also produce returns that match an index fund.

You can make significant wealth with the stock market

Stock market trading can seem complicated, but the basics can help you get around it. The market is a chaotic amalgamation of a flea market and an auction house where prices move wildly. It is a free market system where a company can raise equity capital from investors who are free to buy and sell those shares.

The price fluctuates wildly here, suggesting that investors take a long-term strategy with a diversified portfolio of stocks. Embracing the basics of stock trading for dummies enriches the experience with the investors benefiting from the stock market’s ability to yield high returns that compound with time.

5 Reasons to Invest in Copper Stocks

Posted on April 3, 2021 by James Paul

Copper is a tertiary commodity, coming in third to the shinier appeal of gold and silver. However, the use of copper permeates almost every aspect of modern society – from consumer goods and automobiles to utilities and construction. Today, copper is the third most used metal across the globe and plays a pivotal role in all major economies and in the developing world.

If you are looking for a hedge against inflation, it is common to consider investing in gold or silver. But another way to diversify your portfolio is including the best copper mining stocks in it.

Here are five reasons to invest in copper stocks.

The demand for copper is high

Copper is the most useful industrial metal on the planet. Its use spans multiple applications and sectors, including industrial wiring, computer components, mobile technologies, the automotive industry, and new home and commercial construction, to name a few.

Most of these industries perform extremely well in economically stable periods and relatively well during times of turbulence or recession. For this reason, an investment in copper is actually an investment in growth.

Use will likely increase in the coming years

Until now, copper prices have remained somewhat contingent on trade talks between China and the United States. Growing optimism about a possible deal has recently boosted demand and pricing.

China is the world’s biggest consumer of copper, accounting for over 40% of global demand. The United States and the European Union follow, and India has emerged as the fourth largest global consumer of copper.

China had stockpiled huge stores of refined copper and contributed to a decrease in their demand. As the country is starting to leave the economic slowdown caused by the coronavirus pandemic, it continues to move towards urbanization, a long-run strategy that will take several decades to complete. This is a positive indicator for increased copper demand.

On the other hand, with India’s population expected to surpass China by 2025, the country’s continuous efforts towards improving its current infrastructure and a push towards economic growth will have a positive impact on pushing copper prices higher.

Production occurs in politically stable regions

The majority of copper production is centered in South America. Chile, at 5.6 million MT, is the world’s largest copper mine. The country produces more than double the amount of the next highest producer, Peru, at 2.4 million MT. Chile’s mining company Codelco is the top copper-producing company. Unfortunately, because it is state owned, it is not available to investors. Chile also has the highest copper reserves at 200 million MT.

There are many major and mid-tier copper producers to choose from

The largest copper miners with the best copper mining stocks are Freeport-McMoRan (NYSE:FCX) and Glencore (LSE:GLEN,OTC Pink:GLCNF). They produced 3.247 million pounds and 1.371 million MT of copper supply in 2019, respectively.

Another strong contender for the best copper stocks to buy is BHP Billiton, which produces more than 1 million MT per year of mined copper (ASX:BHP,NYSE:BHP,LSE:BLT). The company delivered over 1.689 million MT in 2019.

Other key players in the world’s copper market that own or operate copper mines or copper deposits include Southern Copper (NYSE:SCCO), Rio Tinto (LSE:RIO,NYSE:RIO,ASX:RIO) and Anglo American (LSE:AAL,OTCQX:AAUKF).

If you want to buy copper stocks that have potential, these are the ones to go for.

Copper prices are low

The past few years have seen copper prices drop to an all-time low, and only recently they started to rebound.

As global demand shows strong signs of ramping up quickly, and current levels of supply are diminishing, the time could not be better for investors who are looking for a sound, long-term investment into growth.

Conclusion

Copper shows every sign of a commodity that is worth having in your portfolio, as it is not prone to significant fluctuations in the price but offers the possibility for long-term increase in value.

Being used across many industries with hundreds of applications, it is safe to say that demand for copper will only drive the price up in the coming years. This presents a good opportunity if you want to invest in copper stocks to enter now when the price is still relatively low.

Finally, it is important to understand that copper is different from gold and silver. Purchasing copper bullion is not convenient for investors, as to invest in bullion with any scale, you will require significant space for storage. A much better solution is to buy copper stocks.

This post was written by Rex Rocks on behalf of Hot Chili Ltd., an Australia based copper mining company with three exciting projects located in Chile. You can follow Hot Chili Ltd. on LinkedIn.

An Introduction to the Relative Strength Index in Trading

Posted on March 22, 2021 by James Paul

Have you heard other forex traders using the term RSI and wondered what they were talking about? If so, your curiosity can pay off if you learn not only what the RSI indicator is but how to use it effectively in your day-to-day transactions. Truth be told, this handy math-based formula is a powerful tool for traders of all types, not just those who buy and sell currency pairs. You can look up a definition and learn that the letters stand for relative strength index, but if you want to dig into the mathematics behind the formula, you might come away even more confused. The quickest way to acquire an understanding of how to actually use it in your own trading is to look at four key facts below.

It Measures Momentum

The first point to absorb is that the relative strength indicator is mathematically designed to measure price momentum. It’s obvious that the prices of almost every currency pair rise and fall constantly, but wouldn’t it be nice to know how strong those rising and falling tides are? That’s what RSI measures, and it does it with a factor between 0 and 100.

An Example of the 70/30 Rule

A real-world example is to suppose you look at a chart for ABC Corp. share prices, or the current price of your favorite forex pair. You can enable the RSI indicator on the chart to see the relative strength values underneath the main chart. If the current RSI factor is above 70, the market is said to be over-sold, or getting ready to drop. A value below 30 reveals a market that is over-bought, or about to experience a rise in prices.

The Nuance of the 70/30 Rule

Here’s the nuance of the above rule, and you can test it out for yourself on pricing charts for stocks, precious metals, or currency pairs in forex trading with brokers like easy Markets. An RSI above 70 means there is strong momentum that is about to peter out. But, when will that be? Likewise, a value below 30 means prices are set to rise soon, but how soon?

You can usually get a clear answer to those two questions of timing by waiting for the RSI line to puncture the 30 or 70 threshold and enter the middle zone of the chart. For instance, let’s say you’re observing XYZ Corporation’s chart and notice that the relative strength line has been above 70 for several weeks, indicating that prices are getting ready to fall. Many traders won’t sell until the factor breaks below the 70 mark and begins to travel downward. That’s the nuance of knowing how to use this indicator for sell and buy signals. Note that a buy signal would be when the indicator is below 30 for a while and ten breaks through and above 30, headed upward.

RSI is Best Used with Other Indicators

If you combine other data with relative strength, you can get confirmation of trend direction much more easily. Typically, people use relative strength with moving averages or any of a dozen or so other indicators to gain a clearer picture of price behavior.

Selection Procedures of the Best Forex Brokers

Posted on February 11, 2021 by James Paul

Success in Forex trading mostly depends on the selection of the right broker at the right time. Study shows that a great number of investors make big mistakes during the selection a broker which affects their trading later. No strategy will be effective until the brokerage house provides better support.

It is pathetic that most of investors end up with their trading career as they did not get the best support from them. Selection of a good broker is not as easy as it may seem at the beginning. Today, we will discuss the selection procedures of them with a little bit of internet research.

1. Membership

We have to check if he has the required membership from the trading regulatory authorities or not. He must be a member of the National Futures Association (NFA). The NFA combats against the fraudulent and works for the interest of the investors. If the necessary certification is not found at a specific brokerage house, it will be a good choice to leave them.

2. Support

To select the right one, a beginner must check the support center of the brokerage house to check their professionalism. Checking the professionalism of the brokers are not that tougher as it may seem. An investor may give a direct phone call to their support center and if he gets the answer, he should consider. In the support center, a trader should ask a variety of questions regarding trading and if he finds satisfactory answers, everything can be taken positively. Some of the novice traders often say that they don’t have any idea about high-end brokers. Click to read more about the professional broker Saxo and you will get a decent idea about an elite broker.

3. Deposit

Beginners should check how much deposit they have to make to start Forex trading. If the investment is lower, it will be very helpful for beginners. Some offer an investment of$10 or more for beginners. The investment facility varies trader to trader, and some of them provide no investment facility. We may also ask them what the minimum amount of investment is to start FX trading. If we get a positive answer that works with our goal, we can easily take them up on their offers.

4. Leverage

This is a great tool which offers great support to beginners. The leverage option works as a loan and this support varies from each other. Using this facility an investor can take at least 1:10 leverage option which indicates that in $10 of investment, an investor can get the power of $100. Sometimes, this ratio of leverage can be 1:50 based on the services of the brokerage houses.

But newbies should be careful of the usage of the leverage as it may cause huge suffering if a larger amount of leverage is taken. Rookies must keep in mind that they are taking the leverage from the brokers as loan. If losses occur, they have to pay back the money from their own account. Disastrous things may happen in this case and the account may be closed because the account balance is zero.

5. Payment method

Newbies must verify their account to send payment securely. Sometimes, it is found that scammers act like brokers and take all the money from a new trader. They offer an attractive offer to start FX trading with them. An investor should also check if he or she accepts bank wire, check or credit card. He should check their authenticity before using any of the payment gateways.

At the bottom line, it can be said that checking all the necessary documents of them will help us to make a safer investment. Experts believe in the authenticity of their broker and take all necessary measures before choosing the right one for them.

Finding Serenity Like the Elite Forex Trader

Posted on February 11, 2021 by James Paul

Traders should work hard so that they can be able to achieve the goal. People should try to take the necessary steps which will help to get the returns. At investment business, it is necessary to take the correct decision which will help to get good outcomes. Investors should develop some cognition which will help to identify the situation and take the right action. There are some techniques of becoming victorious which are being discussed here.

Finding your path

Smart traders always work on their approach so that they can stay on the right track. If you do not use any plan, it will not be possible to secure success. Traders should fix a goal so that they can be able to make the right roadmap. The person should invest time in making a good strategy so that he can be able to become successful. The investor should not start trading without making a fruitful plan. This is not possible to deal with the difficulties, without any strategy. People should know how to tackle the situation. If you have an advanced strategy, it will be possible to take the right steps.

Testing your skill

The investor can go for the demo account so that he can be able to practice properly. People should try to improve the necessary skills so that they can be able to get the success. Here, it is necessary to improve the risk management skill and technical skills which will help to operate the task properly. Traders should not avoid the practice properly which will help to achieve the target. Without practice, it is not possible to take the right action. In Forex market, people should trail the strategy in different timeframes to understand whether it is applicable to the situation or not. Once you get skilled, trade with a high end forex broker. Trading is easy even though they will give you access to advanced tools. So, never get confused with your actions.

Avoid the Recency Bias

The person should try to avoid the recency bias so that they can be able to think for the future. People should know how that there are so many opportunities in Forex market. Traders should try to grab the right opportunity. However, if you cannot be able to forget the result of the previous outcomes, it will not be possible to stay in the market. Here, people must try to control the emotions which are responsible for the failure. If you cannot be able to reduce the negative emotions, it will be difficult to do better. In Forex market, investors should not work continuously as it is not possible to keep the concentration. People should try to reduce the stress. For this, it is necessary to do meditation which will remove the negativity from the mind.

Optimize your account leverage

Leverage gives the chance to trade more. People should try to keep more capital so that they can be able to stay in the market for a long time. When the investor will take the excessive leverage, the risk is automatically increased. Traders should contemplate the capital before taking leverage. You should remember that leverage is one kind of debt.

Be Up to Date with the Market

If you keep the economic calendar, it will be possible to know about the hour of important news announcements. Traders should know about the important components which are responsible for the changes in the price movements. People should not miss any information as it can create problems for them. By knowing about the news, it is will much easier to take better trades.

In Forex market, if the investor is not flexible enough, it will be tough to take the right decision. Without gathering the important information, it is not possible to get success. Traders should take every step consciously so that they do not lose money.

Factors Which You Can Control at Trading

Posted on January 21, 2021 by James Paul

Traders cannot be able to control everything in the market. But, some certain things they can easily control which ultimately decide their future. When someone fails failure, he thinks that the market is responsible for that as it is not stable. However, if you want, you can control the things that can secure your career. Most of the time, the investors do not understand what they are capable of controlling which is necessary to know. Let’s know about the things that the traders can control.

When You Trade

Trade execution is totally dependent on the traders. If they think that it is a good time for taking entry in the market, they can do this. It is a big benefit for investors. Sometimes, novice investors think that they are required to stay in the market for the whole time. Actually, the investors are needed to choose the trade which can provide decent rewards. Professionals do not try to stay in the market and they want to open the position at the right time. People should try to identify the entry signal properly so that they able to gain good returns. If the person fails to identify the signals, he will not gain success.

When to Stop

People can decide when to stop. Investors should need to close the position when it is necessary. If the investors fail to close the position in time, they may face huge problems. Sometimes, the investors hold the position for a long time, in this time, they should aware of the fact that how much time they need to hold this. When the person will see that the price is going to the stop-loss, he should not try to hold this anymore and close it for reducing the loss. If you chose a great broker like Rakuten, you can easily execute the trades. Trading with Rakuten is easy but this doesn’t mean, you will not follow the basic rules of investment. Always remember when to stop at trading.

Pick the Weapons

The investors can pick the weapons that they want. People use different types of indicators to make the decision. In the market, the person will face different types of situations and they are required to identify this properly. Some investors prefer the indicators to take action. On the other hand, some of them prefer to use price action. People can choose their timeframe. If you find that the lower timeframe is not appropriate for you, then you can choose the higher timeframe. They can use different trading styles such as quick scalping, day trading, swing trading, and position trading.

Take Your Own Preparation

Retail traders can take their preparation according to their own way. Newcomers are required to take some basic knowledge before coming to this field. People can practice through the demo account. They can gain knowledge about the fundamental and non-theoretical analysis of the market. You can gain knowledge from the trading books if you want. On the other hand, the fresher can also attend the seminars to gain knowledge. But, the beginners should take the preparation properly so that they can able to understand the different conditions of the market.

Control the Emotions

Emotions will emerge when the investors will face any difficulties or facing any unexpected winning streak. Because of facing loss, people cannot able to control their emotions and try to avoid reality. During this time, they focus on gaining money and try to recover the loss. As a result, ultimately the investors lose more money. TO control the fear and greed, the person needs to develop a good trading plan that will provide better outcomes. In Forex industry, if anyone tries to implement the strategy without getting the proper preparation, then, it is not possible to gain success.

Outcomes cannot be determined by the traders but they can able to take necessary measures that make it better and secure their capital.

6 Things to Consider When Choosing a Markets Forex

Posted on January 21, 2021 by James Paul

The forex market is growing day by day, which means the competition is also increasing. With so many people joining the market, traders must find a way to stay on top. That is why it is critical to find a reliable and experienced forex trader to work with.

Many markets forex trader exist, and it can be challenging to sift through all of them to find a reliable one. This article will take you through the factors you should consider when looking for a forex trader you can work with.

#1 Credibility

Before you start working with any forex trader, it is essential to check whether he/she is credible. This is the first step to finding a reliable markets forex broker to guide you through your trading process.

With many regulatory agencies available, it is now easy to check the credibility of a broker. These agencies will give you a list of brokers you can trust, making work easier for you. These agencies are all over the world and will help you to find a reliable markets forex trader.

So, before you put your hard-earned money in a broker, take the time to check whether he/she is a member of any regulatory agency. If not, move on and look for a new broker.

#2 Costs

Once you decide to become a forex trader, be ready for transaction costs no matter your currency. Whenever you enter a trade, you will be forced to pay for either a commission or a spread. These rates vary from broker to broker.

As much as you would like to find the cheapest transaction costs, always keep security in mind. Some brokers may offer cheap rates but end up being unreliable. So, you should take the time to check the broker’s reliability and the rates and then select the best option in terms of reliability and rates.

#3 Trading platforms

Usually, most of the forex trading activities happen through your broker’s platform. This means that you will use your broker’s platform frequently. For this reason, ensure you check whether the trading platform of your broker is user-friendly.

Check whether the platform offers you everything you need for your trade. For instance, you should check the charting tools, news feed, and flexibility, among other essential features. With a user-friendly platform, you will execute your trade without a hassle.

#4 Deposits and withdrawals

Forex brokers usually guide you on how to execute your trades with ease. Once you deposit your money and trade successfully, you will need to withdraw your profits. A genuine forex trader should not make it difficult for you to withdraw your profits.

The withdrawal process should be hassle-free and convenient for you and the broker. This is another critical factor you must consider before you select a broker. That is why we go back to the first factor, which is credibility. A credible trader will make your trading experience easy and interesting and allow you to withdraw your profits without difficulties.

#5 Execution

Your broker should always select the best price for your orders so that you gain profits once you execute any trade. A good broker should fill you at the best market price for buying or selling. The filling speed is also essential as it will determine whether you will win the trade or not. With a reliable trader, this shouldn’t be a problem to you.

#6 Relations

It is critical to find a trader you can easily communicate with in case of a problem. People have different personalities, and they handle situations differently. With a trader you can easily approach when there is a technical issue, you will feel satisfied even if things do not work out as planned.

It is critical to know what kind of broker you are about to work with to keep your investment safe. Once you thoroughly scrutinize a potential broker, you can hire them only if you are satisfied. You should, however, be very careful because of the many fraudsters that have penetrated the market.

Golden Tips to Keep the Risk Profile Low in CFD Trading

Posted on January 15, 2021 by James Paul

A strategy is to find the right way to accomplish work. It helps to find the solution to a problem. This is more like solving math. When you are solving a mathematical problem, you first need to understand what the problem is about. When you become familiar with the situation and the variables you are given, you can easily solve the problem by using some specific methods. This is how to hit upon a strategy and use it in your life.

Strategies are also used while strategies and are considered the key tool behind hitting a good deal. The trading market always changes without any prior notice. A trend that was moving upward can drop down overnight without telling a single soul. These situations can often be detrimental to traders. Then what do traders do to prevent facing such situations? The answer is, they hit upon various strategies. They are constantly in search of new ones when they are trading. These strategies can be the step that is distancing you from your profit. That’s why, as a trader, you should know some basic strategies that you can use to make bigger profits while trading.

So here are some of the trading strategies that can be the tools to helps you in CFD trading.

Range trading

Range trading is one of the most popular strategies out there and is widely used by traders due to its simple mechanism. In range trading, stocks are bought from oversold places by a trader where the price is cheaper. Later, that purchased stock is sold at an overbought place to ensure high profit. Since this is not coordinated with long-term trading, this strategy is loved by short-term traders. However, the only hindrance in applying this strategy is that you need to have a clear market analysis for this trading. You need to locate the places where you can buy stocks at a cheaper rate. For this, you need to constantly monitor the charts with the best CFD trading account so that you don’t miss out on a single opportunity. Since this strategy is fully research-based, if you are confident in your market analysis, you can stay positive to gain some profit.

Determine your risk

The main aim of a trader is to maximize the profit rate by limiting losses. Therefore, to maximize profit, traders often tend to take risks. But sometimes taking a higher percentage of risk can lead to bigger losses. That’s why to limit your losses, you need to determine your risk rate. You should keep in mind the risk-reward ratio. In risk-reward ratio, it states the ratio of risk taken and estimated profit. If you make a loss of $100 but make a profit of $300, your risk-reward ratio is 1:3. You can also use stop-loss points to stop your losses from going below the level previously set by you to decrease the loss amount. You should be aware that in trading, a lower loss is always better than a higher loss.

Follow a trading plan

A trading plan helps the traders to work in an organized and systematic way. This reduces extravagancy and helps traders to stay away from unnecessary activities. Following a trading plan also helps a trader to speculate the market better than before. When you follow a trading plan, it enables you to think more efficiently and helps you to look for better trading opportunities.

Find your mistakes

We always say that it is okay to make mistakes in trading as long as you learn from them. Finding loopholes in your trading is something that every trader should practice. It helps to find out your shortcomings and look for better solutions. This is just like solving a math problem. So never forget to evaluate your mistakes and learn from them.

Learn from the pros

Use the experience of pro traders in your trading. This will be a great strategy for you to apply if you are a beginner in this field. Follow the tips they used in their trading because these are what helped them to become successful. And there are also possibilities that if you use them appropriately, these are going to work for you as well.

Making the right strategies and implementing them can help you accelerate your profit margin by many times. So never lose a chance to look for good strategies in trading.

Beginner Tips and Advice for Day Trading

Posted on August 15, 2020 by James Paul

Let us start with the answer to the question, what is day trading? In short, day trading is buying then selling stocks for a day. A day trader’s goal is to earn small amounts of profit from each trade and add them together over a long time.

A good day trader knows that there is risk involved, but they can minimize it by becoming familiar with the market and watching the news carefully. Overall, there is potential in day trading, as long as you are willing to learn and spend time on it.

Start in Forex

Jumping right into trading stocks can be impossible for many- the minimum amount you need is $25,000. However, there are still ways to get into day trading without that much money. For instance, you could start by trying out the forex, or foreign exchange market.

The forex market requires a significantly lower amount of capital to get started and can be a little less risky for some people. That being said, you might want to try out a demo account before you start putting real funds on the line.

Practice with a Demo Account

Practicing with a demo account is a great idea, as it can give you some experience in day trading before you open a real account. Ninja Trader has a demo service that uses the history of the market, so that you can see how it changes during the day.

You can also try a simulation in various types of day trading- stocks, futures, and forex are all available. That way you can learn your preferred market before you start risking your capital.

Why Traders Fail

There is a big difference between a pro day trader and a beginner, but you can work to become an expert yourself. All that difference is, is knowing how to manage their money.

With day trading, you need to know when to stop, how to minimize risk, and what to look for in the market. It sounds like a lot, but it can become natural for some and soon you will be aware of the signs of a good trade.

A trader only fails when they lack the knowledge to succeed. By informing yourself, you can help yourself achieve success as a day trader.

Make the Most out of Technology

Many people today have access to technology and amazing software- so be sure to make the most of it. Good technology can give you an edge over the thousands of other day traders out there.

A phone app can give you access to information on the market anywhere and let you check on helpful charts and trends. With a strong internet connection, you can make faster, more accurate trading decisions than your competitors who do not have it.

Have a Plan for Risk

Always be sure that you make a plan for risk management. That way, you never lose more capital than you currently have. Know what percent you are comfortable risking, when you should reconsider selling or buying, and when to exit.

It is especially important to know when to stop trading for the day. Frustration can make it harder to keep a clear head and make smart choices in the market.

Conclusion

Day trading can be a way to supplement your income. As long as you are always willing to learn, it could become a lucrative experience for you.

You will want to stay informed, especially as a beginner. Soon, you will find yourself noticing patterns that occur every day or know when to make a retreat.

Skylar Hammond is a writer for True Trader who specializes in topics such as stock trading, personal finance, and forex. He focuses on helping beginners and experts alike learn more about the market and improve their trading skills.

The Amazing World Of Stock Traders – Should You Join Them?

Posted on May 10, 2019 by James Paul

Whoa! I wish I could live that guy’s life. He makes spending money look easy!

Well, when you’ve got thousands to spare, spending really does become easy. It’s so easy, in fact, that buying a new house ora new car won’t be a big deal anymore. Eating out at the most expensive restaurants won’t make you feel so guilty and even buying luxurious things like jewelry and branded goods will feel like a normal everyday thing. Learn more about financial freedom here: https://medium.com/wealth-made-simple-yes-really/what-does-being-financially-free-mean-to-you-9c9dc04c7a8f.

But you have to be born rich in order to live rich, right?

True enough, most of the world’s richest men are born with a silver spoon – actually, make that a golden spoon. And we,laymen, can’t help but envy their good fortune. It makes you think “If I have a rich granddad somewhere just waiting for the right timing to show up, now is probably the time.” But hey, not all of us can have such a fairy tale end and it’s not like all of us want one.

Truth is, there is nothing more satisfying than earning your own wealth (check this out). Sure, getting a huge inheritance from your family or distant relatives can be the best thing ever but it’s harder to appreciate money you haven’t earned yourself. What usually happens is that you’ll be quick to spend that fortune over nothing because you don’t really know how much time and effort was invested into accumulating such wealth. It was just handed down to you for free. It’s hard to value things like that.

Also, just because you didn’t receive a mind-blowing inheritance doesn’t mean you have no right to challenge your own fate. It’s quite the opposite actually. The mere fact that you weren’t born with a gold, silver, or even just a bronze spoon should encourage you to work harder – for yourself and the generations to come. Isn’t it exciting to be in charge of your own fate? Isn’t it more fulfilling to know that you’re not the one inheriting but rather the one to be giving the inheritance? Grab your future by the hand and work your bum off to make your dreams a reality. You’ll enjoy it.

But how do you get there, exactly? How do you go from zero to millionaire?

Well, I’ve got three suggestions for you:

Sell all your organs.
Work 6 full-time jobs for 50 years.
Become a Stock Trader.

Okay, so maybe the first and second options aren’t my best ideas but I am not exaggerating. Your organs are worth a lot so selling them will at least fetch you a million. Too bad you won’t live to see, let alone enjoy it though. If you choose to work your way to becoming a millionaire, then I estimate that it would take you 50 years and six jobs if we are to factor in modern-day average wages. Clearly, option one and two are out of the question basically because they defeat the whole purpose of why you’re trying to be rich in the first place.

The third option, however, is more viable.

If you have the knowledge, skills, and guts to join stock trading, then it’s going to be your one-way ticket to success – express, at that. Even if you don’t have all these things, you can learn them as you go along. Luckily, there are many programs and trading software online that can help you make better trading decisions. You can be a complete and still trade like a pro so to speak. To know which trades are good to start with, you can check out sites like Trading Review today.

I’m sure you have some friends that, for reasons you don’t know, suddenly rose and claimed a pass to the A-league. Well, why not ask them their secret? For all you know, these friends of yours took the plunge into the world of stock trading and came out victorious.

Take baby steps; I’m not suggesting you should quit everything you do and just invest every cent you have in stock trading. Just test the waters; get the feel of it. Becoming a stock trader is not a decision you can make overnight. Take things slow and learn something new about it every day. You’ll know when you’re ready.