If you are looking to start trading in order to earn an easy buck overnight, don’t. Online trading is more than a “million overnight” ambition; it takes time, skill, effort and careful planning for it to become a sustainable, long-term career. Although it is true that online trading can be financially rewarding, to get to that point you need to learn the tricks of the trade first (pun intended!).
We’re laying out a few key elements of successful online trading for newbies and give advice on how to do online trading properly if you are traveling.
What Is Online Trading?
Online trading involves the trading of various financial instruments such as mutual funds, equities, and commodities through an online platform. The chosen online platform helps traders and investors to buy/sell in order to make a profit on top. Prior to starting your trading journey, you need to select an online broker. Your online broker is your virtual banker that manages trades and stores your turnover money into an account. Depending on the trading firm you choose to work with, you can get various levels of help. You can do online trading from wherever you want, as long as you have a computer with you and a safe (and fast!) internet connection.
Things to Ask Yourself Before You Start Trading
Consider the following for the best online trading results:
What’s My Budget?
Every investment-related business should start with a proper plan and a realistic overview of your current finances and expectations. Before you actually invest, think realistically about how much money you plan to invest. You’ll usually need to have a certain amount of money (a minimum amount) in your account before you start trading.
How Often Do You Plan to Make Trades?
When it comes to trading, there are two options: you can either buy a single stock and hold on to it or make lots of trades, trying to get the most for your buck. In both cases, you’ll be working with a broker who charges fees. Make sure you agree on a solid fee price per trade (the more trades, the better).
Do I Have the Time, Experience and Patience to Trade?
While trading does seem like a kid’s game when you are an observer and “something everyone can do”, it really does take a lot of patience and knowledge to get things right. Even when you have a reliable broker, you still need to know what you are saying “yes” to before you make an investment. So, before you start trading, make sure you educate yourself on the benefits and hardships of online trading to get all the info you need.
What Do I Want to Get out of This Trading?
There is a number of trading sites that focuses on the simple dynamics of buying and selling stocks. For most traders, this works just fine. However, there sites that are more like virtual banks that trading platforms, offering mortgage loans, debit cards, and opportunities for other investments like bonds and futures. Explore your options.
Do I Trust My Broker?
No matter how well you trade, unless you have a trusted broker – it’s all for nothing! Since you’ll be sharing your personal and financial information with your broker, make sure they have good security measures, such as:
- Automatic logouts
- Transmission encryption
- A reputable history of brokerage experience
- The firm they are with is legitimate
Online Trading for Digital Nomads – Key Points and Essentials
Being a digital nomad is totally great, especially when you are in a business that allows you freedom in movement and frees you of office hours, just like trading does. Still, do consider these few technical things to cover before you grab your laptop and leave for Somalia on an online trading adventure for a month:
Keep Tabs on Financial News and Websites
The beauty of online trading is that you can trade elements from all around the world, no matter where you are. The more knowledge you’ve got about the market investment, the better. Stay on top of the latest financial news and websites, take up investing courses, listen to podcasts, etc. These are extremely important for being a good investor and they can all be done while you are on a train or a plain to your next destination!
Practice with an Online Stock Simulator
This is one of our favorite tips for everyone who’s in online trading, especially the newbies. Online stock trading simulators help you learn online trading by simulating possible situations and ways to recognize potential wins. The best part? The potential losses cost you NOTHING given this is a simulator! If your laptop’s got a good battery, you can do this while waiting for your flight, or when you are already on your way to God-knows-where.
Do Regular Trader Reviews
Regular (daily) trader reviews are essential for everyone in online trading. By checking the dynamics of your previous day, you are getting an insight into what went bad and what was successful, and you learn how to trade today. Every serious investor doesn’t let a day go by without doing their daily trader review.
Secure a Fast Internet Connection
For all of the online traders who travel, it’s essential you secure a fast internet connection because otherwise, you won’t be able to trade. If you are staying in a hotel/hostel, call in advance to ask for a room with good internet connection. Also, it wouldn’t hurt to do a little investing in terms of finding out what cafes and restaurants near your hotel offer solid internet connection (just in case!).
Always Have a Backup Plan
No matter how fantastic your laptop is, you are bound to face an unexpected problem, at least once – whether it’s a Windows update gone wrong, a buttery burst, an electric problem at the place where you are staying or a jammed up program messing up with your entire system. For online traders, especially those who trade and travel, it’s essential you have a backup plan. So, always have an extra laptop with you at all times (it’d be great if it’s just as quality as your regular one) and an iPad. Why an iPad? Because you can turn it into an external monitor and help you proceed with your trading uninterrupted! Just install an app called “DuetDisplay” and you’ll be good to go!
No matter how great a trader you are, there’ll always be bad trades and good trades. Both are completely normal for this line of business. If you keep the above points in mind, online share trading will be a profitable task for you. Just keep practicing and mind your risk management as you should!