Trading on the stock exchange is an area of financial transactions with a high risk level. Making easy money and outplaying the Forex or stock market is an almost impossible task even for a skilled professional. Moreover, even for a relatively small income, you need to have talent, skills and a set of must-have tools
Attention! Speculative transactions on Forex and other exchanges, as well as investments in exchange-traded assets, are believed to be transactions with a high level of risk. There is a high chance to lose all your investments.
Nonetheless, let’s talk about some tools any trader should check before making his or her first deposit and making the first deal.
You need a reliable broker
One of the priority requirements of rational trading is a brokerage company you find to cooperate with. You will not be able to enter into transactions on the stock exchange. You do not have a license and accreditation, nor do you have the appropriate capital to work with exchange-traded assets without intermediaries.
Dozens of brokerage companies operate in the segment of financial transactions and investments. They offer different terms of cooperation with clients and different tools that may be disadvantageous or inconvenient in your particular case.
In addition, there are many scammers and companies with a bad reputation in the brokerage market. They can falsify data, deliberately slow down the execution of orders, simulate situations in which you probably lose your deposits, freeze accounts and make other things to pocket your money. To add, if the broker is interested in the results of your trades, this is not good.
Fraudsters, as a rule, do not even have connections with a real exchange. Such a “broker” usually has a beautiful website and even “fake” licenses, a lot of bonuses and articles about ‘how to make money with Forex in several clicks’. Their distinguishing feature is too attractive terms of cooperation, bonuses, promotions and even guarantees (it is impossible to guarantee anything in the high risk finance market).
Therefore, we recommend you choosing a broker with extreme responsibility. Examine all legal data you can find about a particular company, check the country of registration, permission for brokerage activities in your country, reliability of licenses and other documents. Pay attention to the range of available exchanges, as well as the type and speed of execution of traders’ orders. It can take several hours of time but it’s worth it.
Compare carefully the terms of cooperation, the size of the spread and other commissions, check the methods of depositing and withdrawing money. Study the information on the official websites of companies, as well as in independent sources – on the websites of regulators, government agencies, in the media.
Don’t forget about reviews and feedback that can be found on independent portals like https://tradersunion.com/. Check the rating and expert reviews with all pros and cons of any broker.
Money and risk management skills
Remember one important rule – you can’t make money easily on the stock exchange. Be prepared that you will have to work and study hard, to control your emotions. Talking about earnings – they will correspond to the investment and the acceptable level of risk. If you are looking for easy and fast money, you can lose your investment in the blink of an eye.
First, set aside capital for trading or investments that you could theoretically lose. Never risk the amounts you need in real life. If there is no capital yet, refrain from exchange transactions.
Second, never risk everything at once. Divide the investment capital into several parts. Experienced traders never trade more than 3-5% of their capital in a single deal.
Third, always assess the level of risk. Remember that any trade can fail for you and you could lose your money. Calculate what level of risk is acceptable for you and follow the chosen trading strategy. Never try to earn all the money in the world and set adequate margins of expectable profit.
Finally, don’t try to turn speculation and investment into gambling. Every step you take should be carefully considered. Emotions and illusions don’t have to control your decisions.
Market analytics and monitoring tools
As mentioned above, trades on the exchange are not based on trader’s emotion or luck. A trader must be able to analyze the market, make informed predictions and look for trends in order to make perspective deals.
There are two main approaches to analyzing the exchange market. This is a fundamental analysis based on the information and news background. It is technical analysis based on technical data and statistics. Traders usually use both approaches at once to make predictions and adjust their trading strategy.
Market analytics tools depend on the exchange-traded assets and the area in which you work with your capital. The main thing is that the information and data that are broadcast in the selected sources should be true and up to date.
Tools for learning
It is desirable that the broker provides an opportunity for training in the “demo” mode. This training mode with virtual ‘fake’ money will help you understand the basic principles of trading and exchange operations.
If you are a beginner trader, it is highly recommended to start training with a demo account, and then, if you think you are ready, make a minimum deposit without risking serious amounts.
Stay tuned for news coverage to help you understand fundamental analysis. Also find tools for technical analysis with access to statistics and other relevant information.
Read analytical and expert materials. Despite the fact that other people’s articles and advice cannot be a guarantee of the correct decision, you can listen to the opinion of experienced traders and other users.
Forums, blogs, groups in social networks like Facebook and articles on the pages of thematic sites – these are auxiliary tools for learning.
Remember, a good trader always places a lot of emphasis on learning and improving. Moreover, you need to learn constantly, testing new trading strategies and improving your own skills. If you are not ready for this – you’d better not even start trading.