Do you want to venture into trading markets? Or do you want to learn about online trading but don’t know where to start? Check out our mini-guide to better understand trading and learn how to trade and earn money today.
The definition of trading
Trading consists of buying or selling assets in different financial markets. Unlike investing, the objective of trading is to speculate on market trends and act on changes in the prices of financial assets.
Selecting your trading intermediary
The most convenient way to start trading markets is via the online brokerage service. There are several important factors to pay attention to in order to select the broker. As already mentioned, the broker should comply with strict trading regulations. That’s the guarantee you start your trading on a highly secured platform and that you deal with an honest and trustworthy company.
Moreover, the broker that is ready to enable you free education through tutorials, ebooks, or even mini-courses should be at the top of your list.
Furthermore, make sure that the company enables opening various types of trading accounts and diverse trading assets. That will get you more wiggle room for diversification of investments and risk management.
Finally, choose the trading intermediary in line with your trading plan, meaning the initial capital you are ready to invest, the strategies you aim to implement, and so on.
Financial assets are grouped into several categories:
- Commodities (gold, oil, etc.)
- Stocks (the Stock Exchange)
- Bonds: a value representing a share of a company’s debts
- CFD (Contract for Difference): Trading derivatives to speculate on rapidly changing financial markets (forex, commodities, etc.)
- Stock market indices (CAC 40, Nasdaq, etc.)
- Forex (currency pairs)
- Cryptocurrencies (Bitcoin, Ethereum, etc.)
Fees applied to online trading.
To better understand trading, you should also be aware of the various fees you may encounter when opening an online trading account.
Although online brokers offer much more attractive prices than bank brokers, this does not necessarily mean that the cheapest online brokers are necessarily the most attractive to you.
The different fees applied to online trading are:
- Account opening and closing costs
- Transfer fees
- Spread fees
- Rollover fees
These brokerage fees are either fixed or as a percentage.
Regulation in trading
Before you start trading, it is important to know that the regulations in the world of speculation are very strict. All brokers are regulated and must obtain licenses to be able to operate on the national market. It makes it possible to certify the authenticity of the broker and his quality of services.
All official regulatory authorities will:
- ensure the protection of the traders,
- regulate brokers and provide exemptions in the event of non-compliance,
- supervise and exercise regular control over them.
Payment methods for online trading
In addition to the regulations, it is also important to consider the different payment methods offered by the broker. Each broker chooses the payment methods used as well as the fees applied.
Although you usually have the choice to make your deposits or withdrawals, the bank card is still widely used. Bank transfers, although secure and practical, remain very slow in terms of processing times.
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