Home Business Insights & Advice What is it and how to trade online

What is it and how to trade online

by John Saunders
7th Feb 20 1:05 pm

Although we imagine countless images of people operating on the stock exchange, gesturing, buying and selling, handling all kinds of financial tools, not all of us clearly understand what trading is… especially in its digital modality.

What is online trading?

This type of investment over the Internet implies commercializing financial products that are publicly traded through a platform offered by a broker. The main difference of online trading  in UK concerning “physical” trading is that using its digital version, there is no need to move to the agent’s office, but that the trader himself can perform his operations with the click of a button… anytime, anywhere!

The ultimate goal of trading is, of course, to obtain the highest possible profitability of your operations on the principle of “buy cheap and sell expensive”, or simply allowing yourself be guided by trends.

The main advantage of this type of trading is that it allows generating greater profitability, even if it is contrary to the trends, as it implies putting at up or down stake. If the market trend is chosen correctly, you can obtain substantial benefits.

Trader function

A trader is a person responsible for operations, that is, one who develops financial transactions, a person who invests his own money. There are different types of traders:

  1. Intraday. The user performs all of his operations in one day and closes them at the end of this day.
  2. Scalping. Their positions do not last more than a few minutes.
  3. Swing trader. Medium-term traders: operations can be extended to more than one day.
  4. Position trader. Traders who work in the long run. Your operations may be delayed for months or even years.

In Forex trading, traders can operate on their own behalf or use the services of an external trader. This pattern is called Money Manager.

Online trading benefits tips

The first thing to start with is that we are going to deal with financial products, so it will be necessary to use the intermediary services of a good broker, as it was explained earlier.

The chosen broker, subject to his safety and reliability, will provide us with all the necessary tools for work after hiring.

The trading platform is very useful for consulting and using the tools that it provides at our disposal, before making decisions, and requesting the broker the operations that we want to perform.

Why choose Forex market?

Currently, the Forex (Foreign Exchange) market is the most liquid. Billions and billions of currencies circulate within it daily. As an example, it should be noted that each day on Forex is approximately equivalent in volume, 50 times the number of transactions made on the New York Stock Exchange.

Being such a liquid market, Forex is perfect for trading. Besides, the following qualities also make it the best option for short-term trading:

  • different currencies, which multiplies the opportunities;
  • it allows implementing different strategies;
  • low commission fees;
  • ideal volatility, since there is so much foreign exchange, each trader can choose the one that suits him;
  • perfect market for technical analysis;
  • open 24 hours every day of the year.

The Forex market is currently one of the most sought after traders for its great features and its accessibility.

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