Want to Give Online Trading a Go? Start Here

The recent GameStop/Robinhood trading situation has led to a surge of interest in trading among novices in the US and beyond, with many people who were previously not even aware of online trading now seriously considering giving it a go. 

If you’re one of these people – or have been thinking about getting into trading for a while but are unsure how exactly to get started – then this article is just what you’re after.

Read on to discover how online trading works, what assets you can trade, and more.

Which Broker is Best?

Before diving into that, it’s a good idea to first explain what a broker is and how you can determine which is best for you.

A broker is simply the online trading platform you use to access the financial markets and execute trades. The best stock trading platforms have low fees, lightning-fast execution, good transparency, and a great selection of assets to trade.

Instead of trying out loads of different brokers simultaneously to get an idea of how good they are, you should simply read online reviews and comparisons to help you determine which platform is best for you.

Keep in mind that some online trading platforms are only available in certain jurisdictions, so be sure to check that a particular broker is available in your country before spending time researching them. 

How Can I Start Trading Online?

You can start trading from the comfort of your own bedroom in a matter of minutes. You simply need to make an account with an online trading platform (you’ll need to input some basic details like your name, address, contact details and previous trading experience) and then deposit funds.

Keep in mind that all regulated online brokers will require you to verify your identity and address before you can withdraw your funds, even if it’s not required as part of the signup process. 

What Assets Can I Trade?

Most online trading platforms allow you to trade all of the main asset classes, which include:

Stocks 

Stocks are simply slices of ownership in publicly traded companies. Not only do they give you a share of the profits (if the company decides to pay a dividend), they also give you a vote in how the company is run. 

FOREX

The FOREX market is simply the global currency exchange market. It is by far the most liquid market in the world, and it essentially allows you to speculate on the value of one currency relative to another, such as the US Dollar (USD) against the Euro (EUR).

Commodities

Commodities include things like oil, natural gas, gold, silver, and even pork bellies. They are typically very volatile and are therefore usually only traded by more experienced traders. 

Trading Tips

Here are some handy trading tips to give you a better chance of profitably trading the financial markets. 

Utilize a Demo Account

Online trading can be a very exciting endeavor, especially at the very beginning. But it’s imperative you don’t get carried away and immediately start trading with a real money account.

Instead, once you’ve learned a few trading strategies and understand how trading works, you should open a demo account and begin testing out your strategies and getting familiar with the platform. 

A demo account gives you a chance to trade all of the main different asset classes, including currencies and stocks, and is almost identical to the real thing. 

Have a Money Management Strategy

Irrespective of what asset class you’re trading or what type of trading strategy you’re utilizing, you should always have a pre-determined money management strategy. 

This gives you a much better chance of making money in the long run and reduces the likelihood of you risking too much of your capital on a single trade. 

Stay Disciplined 

Trading can be very emotionally difficult, especially when you’re losing money but also when you’re winning.

It’s absolutely crucial to remain disciplined and stick to your strategy, as trading based on your emotions can be reckless and is often more akin to gambling than investing.