So you’ve decided to try your hand at trading for a living. Congrats! The world of online investing is a lucrative one, and it’s been around for long enough that even the most experienced traders have been racking up considerable savings. If you’re wondering where to start, here are some useful tips to help you become a successful trader.
Find The Best Platform
You’ll naturally want to do your research before you make any long-term investing decisions, and one of the most important things you need to consider is the platform you’ll be using to enter the market. There are several popular online stock marketplaces, such as MetaTrader 4, Interactive Brokers, and MarketsOnline, but you’ll need to make sure that the firm you choose offers the tools and features you need to grow your account and make profitable trades in the future.
The best platform for online investing has features that allow you to visualize your entire portfolio in real-time (in other words, the ability to track your investments at all times), watch markets move in real time, use technical analysis in combination with fundamental analysis, and connect to tens of thousands of different instruments, all with relative ease.
Don’t Underestimate The Power Of Education
One of the things that separates successful investors from those who are just stumbling along is the fact that the experienced traders have taken the time to learn how to manage their money effectively. By taking courses or reading books on investing, you’ll be able to significantly improve your odds of generating lucrative returns on your investment dollars. Moreover, many major investment houses offer in-house education programs for their staff, which means you may even be able to get some free college courses.
Join A Society
Joining a society of some kind is another great way to get ahead in this game. The reason for this is the same as the previous tip: experienced and successful investors leverage their network and connections to get the best prices for their stocks, as well as access to lucrative events where they can meet face-to-face with potential partners and clients. So, if you have an alumni network at your university, or if you know any good contacts at all kinds of places, join the club and see what you can do.
Make Sure You Have Enough Money To Live On
This one is pretty self-explanatory, but you need to make sure you have enough money to live on no matter what. You can’t put all your eggs in one basket and think that making money on the side is going to provide for your every financial need. A good rule of thumb is to take your total annual income and multiply it by at least two (if not three). This will give you an idea of how much money you need to survive financially speaking.
Don’t Be Foolish
Now, this tip might seem like a no-brainer, but you’d be surprised how many new investors arrive at the site thinking they can get rich quick by picking the right stock at the right time. The fact is, the market is a lot more complicated than that, and you’re almost certainly going to lose money if you try to time the market and pick the next hot stock. The key is to learn how to avoid the most common investment traps and invest in instruments that have the best chance of generating profits.
Don’t Underestimate The Power Of Leverage
In finance, leverage is the ability to increase your potential for profit by applying additional funds to the same investment. To put it simply, it’s the opportunity to make money quickly by combining multiple investments with the hope of generating a profit in the future. In general, the more you have at risk, the higher the potential return — but this comes with a price, as the amount of risk you take on is multiplied by the amount of return you anticipate. If you’re looking to make some quick cash, you may want to consider investing with the hope of generating a profit down the line.
Don’t Let Your Emotions Control Your Decision-Making
One of the biggest mistakes a new investor can make is to trade on emotion rather than logic. It’s pretty easy for our human tendencies to get the better of us, and a good rule of thumb is to keep your emotions in check when making investing decisions. If you feel fear or greed after doing some research, it’s usually a sure sign you’re making the wrong choice. On the other hand, if you feel good about your decision and don’t question it, you’re almost certainly on the right track.
Hopefully, these tips will help get you started in the right direction and give you the best chance at becoming a successful investor. Don’t hesitate to reach out if you have any other questions, and good luck!