Interested in starting your online trading journey? If so, there are a few things you need to know before you even start investing your money. Below are three trading tips for anyone wanting to get the best out of their online experience as an investor.
1. It’s Essential to Choose a Reliable Broker
The broker you choose to trade with will impact your trading success positively or negatively. Do your research, read reviews and compare offers to ensure your broker fits your needs.
Here are some key points to check:
- The broker’s reputation: is it legally regulated and licensed? How long the broker has been in the market?
- The products offered: does the broker offer the assets you wish to trade? Will you be able to diversify your portfolio properly?
- Deposit and withdrawals: are there fees to deposit or withdraw funds? What payment methods are offered? How fast is the processing?
- The trading platform: is it easy to use? Are a desktop and app available? Note that MT4 (MetaTrader 4) is the most popular and reputable platform on the market, so if a broker offers it, it can be a good sign.
2. You Should Choose Your Account Type Wisely
Brokers commonly offer “Mini” and “Standard” accounts, which differ in spreads, contract sizes, leverage and margin out ratio.
- Mini accounts provide a small transaction size and a low minimum deposit. It is thus a good option for beginners.
- Standard accounts offer more competitive spreads in exchange for a high deposit. It is thus best suited for experienced investors.
Brokers sometimes also offer ECN accounts or Professional/Premium accounts. These connect orders directly to the market and match trades in the OTC market. Here, investors enjoy a spread close to zero, but deposits are very high.
Take time to compare your options. You should choose the account that best suits your trading level, strategy, and capital size.
3. Make Use of Free Demo Trading Accounts
Most brokers also offer a demo account for beginners to practice on. If you’re new to trading, you should use this opportunity before investing your real money. Indeed, with a demo account, you trade with virtual money, so there’s no risk of losing your funds. It’s also a perfect opportunity to test the platform and see if it suits your needs.
Keep in mind that demo accounts, while helpful, remove the emotional factors that actual trading provides. Indeed, they don’t deliver the “real” experience in which your “real” money is invested — and thus, you may make rash decisions under the influence of stress, panic or fear. Remember this when trading in demo mode, you have some illusion that it’s “easy to make money”.
Remember that these three tips are just some steps to your successful entry into the online trading world. You should always research, keep learning about trading, and remember that actual trading is the most educational experience.