Historically, trading has existed since humans traded by speculating on commodities. In Roman times, market operations first concerned olive oil, then flour. The first stock market was born in the 17th century, in the Netherlands, as well as the first stock market crisis, remembered as the “tulip crisis”. Since then, the financial system has evolved and developed, allowing stock exchanges and financial markets around the world to enter the homes of individuals via online sites. But the question that arises is how to be sure that they are risk-free? And, above all, do you really make money on trading platforms?
What is online trading?
Trading is the English translation to designate the financial operations of buying or selling securities or assets present on the financial markets. This can concern stocks, crypto-currencies, currencies, CFDs (Contract for difference), futures. If before it was necessary to travel to these stock markets (Wall Street in New York, London, Paris, Amsterdam, etc.) or to go through a professional brokerage office, since the 2000s, the financial markets have been present online thanks to online trading sites or platforms.
How to choose your trading site?
For more than two years now, following the Covid-19 pandemic, more and more individuals have embarked on the adventure of online trading thanks to online broker trading platforms. All you have to do is choose your online platform and open an account there. Faced with the large number of sites that want to take advantage of the financial windfall represented by online trading, it is recommended to register on a platform recognized by European and international financial authorities such as the AMF (Autorité des Marchés Financiers). The best platforms are all certified by these institutions and regulated by several central banks. If you wish to register on a trading site but are in doubt, the AMF updates a blacklist of fraudulent sites.
How to trade on online platforms?
After having chosen your online platform, you must register and deposit a minimum sum (generally 100 euros) which will be used for the down payment of the initial transactions. When you start trading, it is recommended to train yourself beforehand, moreover, the most serious trading platforms provide beginner users with demo accounts that allow them to train without risk before moving on to a live trading account. The AvaTrade site, for example, trains its users with more than 50 free tutorials, financial vocabulary sheets and it offers to follow the actions of experienced traders and copy their trading strategies via copy trading.
The risks of online trading
Like any business activity, trading can involve risks for the trader. However, when the risks are calculated and the strategies considered, the losses are very often minimal and the gains more substantial. Also, when budding traders start to speculate, it is advisable to:
- Follow a training course on its trading platform (usually free) in order to know how the chosen interface works, to know what vocabulary is used, how to trade online, how to use the tools made available on the site.
- Manage your stress either by controlling yourself and always taking a step back with trading, or by setting up trading robots that will avoid unthoughtful actions issued under the influence of anxiety.
- Sleep and not lose your bearings. Trading can be very time consuming and disrupt the pace of a trader’s life. Prolonged standby on markets on the other side of the planet is to be avoided, because fatigue will inevitably lead to bad investments. In this case, favor automated trading robots.
Can you make a lot of money with trading?
To this question, one would be tempted to answer: yes and no. In fact, it entirely depends on the strategies adopted by the traders, with or without leverage, according to the budgets of each, according to the markets targeted, etc. Assume that you will not become rich overnight, that you can lose money from your first trade, but also that you can earn, little by little, sums, which put together, will represent a profit. non-negligible. Obviously, if you want to become a full-time trader, you will move into another category where your income is directly calculated on your profits.