What is trading?

Trading is a specific way of investing. You actively trade in, for example, a share. Trading differs from ‘traditional investing’:

Investing: buying a share to achieve price gains in the long term.
Trading: buying and selling a stock quickly.

Trading is much more active than just investing. If you want to be successful with online trading, you will need to reserve more time for it.

Why is trading so lucrative?

You do not need much money to start: $100 is enough to start!
You can use orders and automate your trading activities.
Successful trading does not have to take more than a few hours a week.
Because you can go short, you can also place orders on falling prices.
Thanks to the leverage, you can achieve results with a small amount.
No commissions are charged: therefore, trading can be advantageous!

How can you make money trading?

Making money from trading is certainly possible. As you may know, the share prices, for example, are moving up and down every day. This movement is also called volatility and as a trader, you can benefit from these movements. You can place orders on rising and falling prices. The latter we also call going short. When you go short, you predict that the price will fall, and you get a positive result when this eventually happens.

Here are two broad strategies to choose from: intraday trading and day trading. When day trading, you keep an eye on the price developments and open multiple positions in one day. These positions can be kept open for a longer period. For people with less time, intraday trading is more attractive. When you do intraday trading, you open and close positions on the same day.

In which securities can you trade?

When you start trading, you can trade in different securities. Below is a small list of the different securities in which you can trade:

The basics of trading are simple: you buy when you expect the price to go up, and you sell when you expect it to decrease! However, the implementation is not necessarily simple. In online trading, emotions play an important role. Many people are afraid of losing and therefore keep their loss open for too long. In the meantime, they are also afraid to lose their winnings, which means that they close the position at a small profit.

In the end, it is smart to do the opposite when you are trading. It is better to cut losses and to allow profits to continue. Therefore, always ensure a 'favorable' ratio between your risk and return. For example, if you can lose up to $20 in a position, it is wise to close the position with a profit of $30 to $40. That way, you must get it right in less than 50% of the cases to get a good result!

What is the best way to practice?

You must practice a lot! Trading is a skill you do not learn from books. Of course, you can learn aspects of trading, such as technical and fundamental analysis, from a book. However, only theoretical knowledge is not enough. Therefore, it is important to practice often. Try out different investment methods and see if you manage to achieve a positive result.

Do you want to try online trading yourself? Then open an account with an online broker and try out the possibilities. We have listed the best parties for you

How do you become a good trader?

After you have read this article, you will know exactly how to get started with online trading. But of course, just trading online is not enough: You also want to achieve good results. In this part of the article, we look at what you need to consider when you want to make money from trading.

Follow the trend

In many industries, it works well to be opinionated. Artists make more money when they create something unique and as an entrepreneur, you better come up with an original plan. Unfortunately, when you start trading, this works a little differently!

If you want to get a good result, it is wise to trade with the trend as much as possible. Creativity is therefore often not beneficial. Investors sometimes say the trend is your friend. By buying when prices are mainly rising and selling when prices are mainly falling, you greatly increase the chances of success.

Have a plan

The best traders understand that they need a plan to deliver good results. First, determine the amount of money you want to trade with. This is your ‘corporate capital’. Based on this, you can determine the size of the positions you can take.

If you want to act wisely, you set fixed percentages with which you trade. For example, risk no more than two to five percent of your total invested capital on a single trade. This will prevent you from losing the full amount in your trading account. When things go well, it is prudent to stop trading and evaluate your performance. Be critical of yourself and make sure you always trade profitably in the long run.

Everyone seems to want to have an opinion about everything. Racial matters, the climate or the future of the European Union. Everyone is an expert these days. As a trader, it is better not to have an opinion.

Do not act based on what you think is good or bad. The stock markets often anticipate good news or bad news. When good news is expected, people start buying shares. As soon as the news is presented, you see that many traders take their profits, which can cause the price to fall. So, it is not about your opinion, it is about the actions of large groups of traders.

Set simple rules

Finally, it is important to draw up simple rules. The most complex system is often not the best trading system. A good trader needs a lot of discipline. When you make the rules too complicated, it is a lot easier to (accidentally) deviate from them.

Therefore, set some rules that determine whether you open a trade or not. Then evaluate these rules constantly and adjust where necessary.

Trading as a profession,

Many people encounter trading while they hold another job. They trade in addition to their profession. However, it is also possible to trade within a company.

Traders often earn a high salary. The average salary is around $600 per month with outliers to $7500 per month. In addition, traders have good working conditions, and you can get high bonuses.

What is a trader?

A trader is someone who actively trades on the market. Anyone can become a trader. To do so, you only need to open an account with an online broker. You can already start trading with an amount of $100.

What is day - trading?

Day-trading also means within the day. Many securities are traded within a session. For example, shares are traded during the opening hours of the stock exchange. Day traders try to take advantage of these fluctuations by taking one or more positions during this session. A Day trader will close his positions before the end of the trading session.