It’s an available avenue in today’s stock trading platform, and one that does away with the middleman. But the big question is whether this channel of amassing wealth is legit.
The reasons for option to trade one’s stocks are varied, but the rules for doing so are the same. Here are 10 things to note as you strive to become a successful online trader.
1) You will be paying less
Since you are doing away with the middleman (broker), you have less trading expenses to think about. We can all agree that finding a legit broker, like CMC Markets, is a tough quest, and where you find one, affording them is next to impossible. So online trading comes as an affordable option to start you off before thinking about brokers at some later point. But there is some serious work to be done.
2) No need to attend any classes
There is a wealth of information about online trading to get your hands on. This can be eBooks, paperback magazines or novels, blog articles or weekly subscriptions from credible sources like CMC markets. No, you don’t need to pay any study course to get started in online trading, expand your knowledge through written content and keep practising your trading skills.
3) Invest in a trading simulator
Many investors shy away from online trading because of lack of knowledge. No one is willing to risk going at something on their own and fail miserably. Nonetheless, there is an easy way to first practice before channelling money and it’s through trading simulators. These simulators allow you trade virtual money on the real platform to get a hang of things before investing your money.
4) A lot of your time will be spent in research
Normally the broker does all the ground work and reports their findings back to you—through instant texts, RSS feeds etc. Now that you are flying solo, all the analysis of market indices, monitoring of price fluctuations or predicting future market outcomes rests entirely on you. This means putting in double the time as an investor and a personal broker.
5) You need good internet connection
Things don’t move slowly in the stock market, especially if you are trading in binary of CFC accounts. You will need internet connection with insane browsing speeds to ensure you don’t miss any opportunity coming your way. When you make a trade, you require the assurance that it was successfully completed and not just make assumptions because of the many times you refreshed your page. So where you exclude the immediate broker, you have to replace that with fast internet connection.
6) Practice trading discipline early
You’ve probably heard of online traders who burn out within their first months of trading. A lot of them get greedy after their first win and decide to take bigger uncalculated risks in the shortest time possible. Either you will make a huge profit or a bankrupting loss from this move. Such odds are highly unpredictable which makes sense why self-control is important as a trader, especially at the early stages of your business.
7) You may end up a lone trader
Omitting brokers from the equation means you will never build solid friendships with them. While you will be saving yourself broker fees, it has a price to pay like missing out on the wealth of information housed by brokers. Remember no information comes free, so if you need their help, and input, you may have to make some sacrifices.
8) Find role models in the stocks world
From Warren Buffet to the inspiring story of Mohammed Islam from Queens, you cannot fail to find a role model out there. Find out how these individuals became rich through stock trading and what drives them to succeed in their endeavours. Some of these personalities are approachable so drop them a chat and see what they say.
9) Your peace of mind
You are no longer dealing with stock broker biasness so your investment is protected. So many investors are led to poor trading decisions because the broker only sees how they will profit from the outcome.
10) Don’t give up
Things may not look rosy the first few months but don’t quit just yet. Keep learning and making those mistakes until you find out what works. Soon enough your success story will be read by other upcoming traders.