It’s the digital age, and the online world has become the go-to place for almost everyone for anything from shopping to investing. Online trading was primed for popularity, thanks to the global shift towards the digital realm which has increased over time. The rise of online trading has been accelerated over the last year as a variety of brokers made their mark in the app stores, and the financial markets are simply booming in 2021. So far this year, the average daily volume of equities is 14.7 billion, versus last year’s 10.9 billion and 2019’s 7 billion totals. If you’re thinking about entering the online trading world, you’ll find yourself with many options, from where to start to what to trade. One way to get yourself sorted is by finding a reliable broker, which offers an innovative trading platform, excellent client support, and free educational materials to ensure traders of all levels can begin to invest with confidence. However, before you start to trade in the form of CFDs, let’s go through five of the most important tips that you should know for your online trading journey.
- Improve your knowledge
Knowledge is the name of the game when it comes to online trading. You can simply never know too much about the financial markets, whether you’re new to trading or a seasoned trader. Enhancing your knowledge is the best place to start, and something that you should continue with throughout your trading journey. Whether it be articles, video tutorials, guides or courses, you should learn about trading strategies, different instruments, trading tools and everything else surrounding the online trading world with a particular focus on the niche that you’re interested in trading. For example, if you’re interested in forex trading as CFDs, you could read up on the past performance of key currency pairs like EUR/USD, acquaint yourself with the various factors that can influence its price and forex trading in general, and read the news to see how current events may affect its price in the future.
- Know your instruments
One of the key factors when it comes to being prepared for online trading is to know your instruments and to trade instruments that you’re comfortable with. Many traders start out by trading instruments that they’re quite familiar with, both in terms of market performance and cultural relevance. For example, those who are interested in trading Bitcoin CFDs would keep track of new cryptocurrencies and how they’re performing, as well as how they are perceived in the media (which may affect their prices). For those who are looking to build a diverse portfolio, the same rules apply: brush up your knowledge of all the instruments involved so that you can make more informed trading decisions. Whether you’re trading CFDs in shares, ETFs, traditional cryptos like Bitcoin or new cryptocurrencies, indices or any other instruments, getting to know each instrument will help you select your focus more easily and make more confident trading decisions.
- Keep up to date
One of the most crucial parts of online trading is keeping up to date with the latest news and market developments. Some brokers, offer Economic Calendars, which make keeping tabs on the financial impact of recent global events quick and easy for traders, as they can search for updates using filters. For things like forex trading and cryptocurrency trading that have high levels of volatility, staying on top of the news is imperative to try and keep ahead of the markets. These markets are impacted by a host of external factors such as new crypto currencies, which can create a stir for current cryptos, or changes in economies which can impact currency trading pairs, so any news relating to these markets can be a good indicator of changes that may occur in instrument prices.
- Give it a try
Take a trading platform for a test drive with a risk-free demo account before you begin trading with actual funds. This is a great idea for new traders to get the hang of how CFD trading works, as well as more seasoned traders who are looking to get acquainted with a new trading platform. Brokers usually offers a demo account of up to $5000 which traders can use to get a feel for the platform and to practise their CFD trading, before committing to using real funds. This is where you can put all your newfound knowledge into practise to make sure that you feel comfortable with online trading.
- Choose the right broker
To be able to trade with confidence, you’ll need to find a broker you can trust. Your broker should offer a wide variety of CFD instruments, trading tools and features that can help you gain valuable insight into your trades, and excellent customer service to ensure you can get answers to questions in a quick and efficient way. Doing a quick search for CFD brokers online can help you find the answers to these queries. The next step to finding the right CFD broker is to consider your needs and make sure that the broker falls in line with these. In other words, if you’re looking for specific tools or instruments that you’d like a broker to have, make sure to do your homework and give that broker a thorough analysis.