Do you want to start online trading? Follow this guide so you understand the process and how to trade safely in the fast-moving digital landscape.
An introduction to trading
Similar to investing, trading is the purchase and sale of securities – assets that can be exchanged in the financial markets. Assets available for trading include:
- Stocks and shares
- Bonds
- Currencies (Forex)
- Commodities
- Incides
The aim is to buy assets at a low price and sell them for a profit once their value has increased. This involves monitoring the markets to track trends so you can spot the best time to invest and release.
Investing and trading are not identical, however. Investors seek to make steady gains for long-term benefit, so they tend to go for slow-growing assets that are resistant to short-term trends. In contrast, traders buy and sell assets at speed to try to capitalise on turbulent fluctuations in the financial markets.
This means that traders will value different assets to investors. For example, the Foreign Exchange Market is the most actively traded because it’s fast-moving while investors prefer to purchase safer securities such as fixed-income bonds.
How to trade online
Online trading began in the 1980s, but it wasn’t until the turn of the century that individuals could use a dedicated trading platform like Tradu to monitor the markets and manage their assets in one place. The introduction of smartphones and apps has made it even easier as traders can access their portfolios and make instant decisions while on the go, from anywhere around the globe.
Choosing your company
Ensure worry-free online trading by taking care to stay safe online. Always enter website addresses manually to avoid falling victim to lookalike sites that are trying to syphon your personal information. An easy way to check if a site is encrypted is to look for SSL protection – indicated by the ‘s’ in ‘https’ in the URL.
You should also research the company to ensure you’re using a legitimate outfit to trade the markets. Check for licences and inclusion on official registers and seek out recent reviews from other users.
Research the process
Aside from finding a reliable online platform, you must be aware of the ins and outs of trading to avoid being drawn into scams or making poor decisions about when to buy and sell.
Take time to thoroughly research the process and analyse the financial markets before you begin. This will give you valuable insight into typical fluctuations and how these changes can affect the value of trading assets.
When you do make the move into online trading, start small and remember to always keep substantial savings aside so you can absorb sudden losses.
