You might have heard a lot about stock exchanges. Every country has one. It is where trade happens (does the term Forex ring a bell?). It is a currency market where currency trading, and other sorts of trading takes place (shares etc). A lot of businesses and individual people invest in the stock market, and earn money. Indeed, some even do it full-time for a living. Granted, some peoples’ fortunes go down as others’ go up. It’s a risky business. But these days, when eCommerce and online transactions are popular, online trading provides a good way to utilize the opportunity and make some money off it. So how do people make money off it?
To get going in this business, you need to have a PC, an internet connection, and some money at hand for the initial investment. There re various websites that will let you trade online. A good one is eToro. First, you have to sign up, and add some money into your account using PayPal or wire transfer. Once done, you’re good to trade!
However, it isn’t all as simple as that. This was the easy part. The hard part is the trading itself. You make money by buying currencies and selling them at a profit, buying and selling shares etc. But how are you to know what shares are best, and what is the best time to sell currencies? well that’s where some know-how of the trade comes in.
An education in trading is really important. Education doesn’t mean you need a degree in Finance or business. It means learning the tricks of the trade. Normally, when you take a gamble with a blog or a similar business, you have nothing to lose, except your hard work. But over here, you lose money. So caution is the most basic requirement for trading.
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Things to remember
First thing’s first, you need to consult with someone who knows about trading, someone you can trust. Because often times, the experienced traders capitalize on a newbie’s lack of experience, and misguide him into making errors that will ultimately benefit themselves. So consult with someone you know before making decisions.
Be ready to take a risk – There’s a lot more risk involved here than in any other business. So always be prepared for a setback anytime, because at one time or another, it will happen, guaranteed. So if you decide to quit after one or two setbacks, then maybe this business isn’t for you. It’s a game of leaps of faith. And the trick of the game is to pick yourself up as quickly as possible when you fall.
Say no to emotional triggers – Trading is as much about mind games as the trading itself. Other people’s words or behavior might dictate your mood. But that doesn’t mean you need to respond to each emotional trigger sent your way. Always stay calm, or you will end up making a hasty decision that will benefit the other parties. Don’t let emotions rule the trade. Let the trade decide your emotions.
Research – Researching the market is the best way to go. Do your homework on the things you are dealing with. For example, if you’re buying and selling company shares, then you must look into that company’s history, and see what sort of record does it have, i.e. has it been successful lately? How high is the failure and success rate, how low have the shares ever been, what are the peak months for that company, what the company is doing currently and how big an impact it will have on the market etc. Consider an oil and gas company for instance. Its shares will go up if it makes an oil discovery, and down when an exploration turns out to be fruitless. If such a company hasn’t made any discoveries lately, and is getting old, then it’s time to ditch it, and go on for a company that has ongoing explorations and has a high success rate.
Those were some fundamentals of the trade. Again, it’s a risky business that might, or might not be worth it. So always be prepared to take a leap of faith, and learn when to make the jump, and when not to. And leave the rest to Providence. Peace, and all the best 🙂