Many people who are successful in their industries have managed to make it so because a lot of their work is done online. Whether it is because they opened an online store, made use of social media to build up brand recognition or used the latest technology available, the web has been integral to them.
The world of financial trading is no exception, being at the forefront of technological advances and offering many opportunities to make money. Taking advantage of live data and numerous markets to invest and trade in is a must for any would-be trader, but can a career be made from it? The answer is yes, but there are a few things you must do before becoming one.
First, you need to learn about how trading actually works. From the foreign exchange (forex) markets and commodities to the 60 major stock exchanges worldwide, look at how trading in each individual market works. You will be surprised by the differences.
While you are doing some research, look at the historical data for each currency, commodity or stock exchange you are interested in. It is also essential to keep up to date with the latest financial news. Stories about a major announcement by a central bank or multinational could have a profound impact on a market’s value.
Crunch the Numbers
To become a successful trader, a firm grasp of math is needed. You need to know about percentages in particular, as any rise or fall in the value of markets, commodities and currencies is sometimes expressed as a percentage of the previous value.
You also need to know how leveraged products work. Forex trading, for example, is a leveraged product. This uses ratios, where the initial amount you deposit e.g. $10, is multiplied several times over, depending on what you are comfortable with.
If, say, you want to trade $10 on the Dollar rising against the Euro, for every point it changes, you get that $10 multiplied by that number of points. The same principle applies if the currency you are trading on goes against what you wanted it to do.
Picking a platform
Any aspiring trader needs to choose a trading platform that makes it easy to start and finish a trade. LGC offers a trading platform for spread betting CFD trading and forex. The platform you choose must be easily accessible by smartphone, tablet and desktop alike.
On your platform, you should be able to pick which product you want to trade. Then, you should have the ability to open and close a trade when you are satisfied with the amount of profit or want to minimise your losses. Finally, your platform must be able to give you live data whenever you want it, informing each decision you make.
Speaking of decisions, you need the ability to think quickly to become a trader. If you leave it too late to close a trade, any losses you do make could become too big. Quick reflexes can help you to make the money needed to be a career trader. Finally, when beginning to trade, try not to take too many risks. If you’re worried about putting too much money in, start small.