Learn how to invest in 3 steps

Trading may seem difficult, but when you follow these three simple steps you too can start earning money by trading! In this article we discuss a few simple steps to guide you towards profitable and successful trading. We also discuss all the skills you need to become really successful in investing.

Three steps to learn trading:

  1. Open a free demo account with one of the best brokers. With a demo account you learn how to trade completely risk-free.
  2. Practice with your demo account: with trading it’s all about practice! Practice does make perfect. By practicing you learn how to recognize patterns and you discover how you can make money trading.
  3. Read a lot about trading – this way you learn the basics. 

Learn how to invest: what do you want to know?

Learn more about active trading

The first step you have to take to learn trading is learning the basics. Trading isn’t too hard, in theory. In this article we tell you how to open a trade so you can get started on your own. Before we get to that, we will discuss why trading is so interesting.

  • You can trade with as little as a $100: you can profit with small amounts.
  • Many brokers give out a free demo so you can try out trading with them.
  • When you trade smart, you can make money no matter the direction of the market.
  • Trading is educational and exciting: you learn by doing!

The first step in the learning process is opening a demo account with a broker. There are many brokers and to make this step a little easier we have already selected the best broker for beginning traders.

Get started with a demo

In this article we look at the basics of trading. The best way to learn is to immediately start trading. You learn by doing! That’s the best way. Plus500 offers simple, yet powerful, software that makes it easy for beginning traders to get started.

The company also welcomes new traders with a demo of $40.000, so you can try out trading with demo money right away. As soon as you are ready you can make your first small deposit and start trading!

When you make a profit with your first deposit of $100, you can put this profit directly in your pocket! Remember that you can always lose your investment. Use the button below to directly open a free demo account with Plus500:

Plus500 register

Plus500 stock software

The trading platform of Plus500. Illustrative prices. 80,5% losses money.

Learning how to trade with Plus500

Let’s take a look at how you can trade on your own at Plus500. With Plus500 you can trade in CFD stock, commodities and Forex. You can open up a position for each of these financial instruments. When you take a position, you speculate on an increase or decrease in the price of the underlying asset.

You have two options: buying and selling. When you buy a CFD stock you make money when the price goes up and when you try to sell a CFD stock you make money when the price goes down. Your result is continuously monitored, but only once you close a position the result is definitive and your result will be credited or deducted from your account.

Orders are a very useful option. With an order you can open or close a position automatically at a certain price. This way you can get the best results on every trade!

Tip: Want to read more about trading? Read our Plus500 tutorial!

Learn long-term investing: complete course

This complete course will look at all the basics of investing. That way you will immediately know and learn how to achieve better results with your investments. Still looking for additional information about investing? At the bottom of the article you will find more courses which might help you to learn more about investing in specific securities.

What will you learn in this course?

What is investing exactly?

Before you can learn how to invest, it is important to understand what investing exactly is. Investing is buying a financial security with the aim of making a profit. A security can be anything. Think about a stock or a bond. But also think about more trendy investment forms like crypto coins and foreign currencies.

Thanks to the introduction of online brokers, anyone can learn to invest nowadays. In this short course about investing, we will talk about the most important aspects of investing to get you off to a flying investment start. 

learn investing

Important tips before you start investing

Below we will discuss some important tips which you should be aware of before you start investing. These tips will learn you how to immediately achieve better results.

Tip 1: the importance of spreading

It is smart to spread your investments as much as possible. When investing all your money in one stock, there is a bigger chance to lose your entire investment. So, how can you spread your investments? First, you can choose to spread your investment for the long and the short term.

  • You can invest part of your money to speculate at a broker such as Plus500.
  • Another part of your money can be used to buy stocks for the long term.

Next you can also spread your investments over different securities. This way you avoid losing your money when one type of security is underperforming.

  • You can invest a part in stocks.
  • Another part can be invested in a fund.
  • And a third part can for example be invested in cryptocoins.

Another strategy is to spread your money over different regions and domains:

  • Invest in different continents: Africa and Europe
  • Invest in different domains: banks and tourism companies

Finally, it is smart to spread your investments over time. Don’t invest all your money at one particular moment in time. That way you will avoid investing all your money before an overall market crash. In short, the most important lesson to learn when you start investing is to manage the risks as much as possible.

Tip 2: lower your costs

Many investors forget to consider the costs related to investing. What a pity! By saving as much as possible on your transaction costs, you can seriously increase your profits. It is therefore of crucial importance to choose a broker which offers low transactions costs. Use the below button to immediately check which party offers the best rates for you:

demo investing

Tip 3: think about the different investment options 

Don’t randomly buy stocks because they look or sound good. It is important to invest in stocks, companies or domains which you clearly understand. Complicated financial products like for example options are not suitable for everyone. By investing in such securities, you can lose your entire investment. Think about the different investment options and carefully consider them before deciding.

What you should do before you invest

The next step in the process for people who like to learn how to invest, is to take some important decisions. Below we look at some decisions which must be taken before you can invest.

Determine your investment type

You will have to choose a particular type of investment. Would you like to actively speculate yourself in the short term? Would you like to select stocks for the long term? Or do you prefer to passively build up a capital by investing in a fund? It is of crucial importance to think about the type of investment which suits you the best. 

Choose a good broker

Next, it is crucial to choose a good broker. A broker is a third-party provider where you can buy and sell financial securities. Would you like to know some good brokers? Use the below button to instantly compare different brokers: 

compare brokers

Make an investment plan

Next, you will have to make an investment plan. What is for example the objective you have in mind? How much money are you planning to invest? Many investors make the mistake of immediately and randomly buying and selling stocks. A better approach is to make a clear plan and afterwards to follow the plan step by step.

You are never too old or too experienced to learn

It is important to keep on learning. Schedule regular evaluation moments. By doing so you can verify if you are getting closer to your goals. Moreover, it is important to write down the lessons you have learned. Keeping track of your progress and knowledge will avoid wasting a lot of time and money.

How does a stock exchange work?

Before you start investing, it is important to learn the ins and outs of the stock exchange. A stock exchange is strongly influenced by the supply and demand game. The stock price for example is continuously changing due to a changing demand and supply.

If a company  announces favorable profits, it will often have a positive effect on the price of the company stocks. Has a company committed fraud? In that case, the stock price will often collapse. When you start investing it is important to understand the different influential aspects. Understanding these aspects you will be better prepared to respond to the latest market developments.

investing course

Learn to achieve successful results

Would you like to achieve successful results? In that case, it is important to apply a good strategy. One important aspect hereby is to manage your money properly. Luckily enough, this can be learned! The basic investment rule is fortunately pretty easy. It is important to open investments for which a favorable value is expected. 

But how to distinguish between a favorable and a non-favorable investment? A favorable investment is an investment which has a positive risk-return ratio. 

An investment with a potential return of 10% and a potential risk of 1% is more interesting than an investment with a potential return of 10% and a potential risk of 30%. Base yourself on the data you have at hand and calculate what you believe to be a realistic return on investment. That way you can determine whether it is interesting to open an investment.

Do you want to learn how to select stocks with a favorable risk-return ratio? Then grab a pen and a piece of paper and determine, based on past data, whether you would buy certain stocks. That way you can immediately determine whether you are taking the right approach. It is important though to remember that past results are no guarantee of future performance.

Learn to invest: additional courses

Would you like to learn how to determine the right timing for opening an investment? Then the below courses might be a big value-add:

Different courses on Trading.info

If you want to learn how to invest well, it is wise to follow specific courses. On trading.info you find enough information to learn how to trade well. Find below an overview of the different informative courses on the website.

Online trading in CFD's

The course online trading  in CFD's learns you all you need to know to take a flying investment start. This new way of investing can also be used for smaller investments. By reading some of our articles you learn what CFD's exactly are and how to use them from an investment point of view. Go to our course page investing in CFD's or choose one of the below articles.

Trading in Forex course

Trading in Forex or investing in currency pairs is becoming increasingly popular. Every day huge amounts of money are involved, and you can benefit from the changing trends. This course aims for the more advanced investor. The course teaches you technical analysis which will help you to determine daily whether you want to open a position on the market.

Tip: although the articles have been written to better understand forex trading, all used indicators & tips can also be applied to stock, commodity and index fund trading! 

Investing in options course

If you would like to invest in derivatives you can also choose options. Options are more expensive and more complicated than CFD's, but they can be traded at traditional banks. Options allow you to speculate on significant price increases and price falls. In this course we discuss options and the most important concepts related to options.  

Investing in bonds course

Bonds are debt securities. Governments and companies can issue bonds. Upon buying a bond, you will receive a periodic interest on it. Bonds are still a relatively safe haven. If you are looking for a safe investment type, bonds might be your cup of tea. In this short course we explain to you what bonds exactly are, and we discuss how you can invest in bonds.

The best way to learn investing?

In the end, practice is the key to investment success. 20% knowledge, 80% practice. Many investors fail because they have the wrong mindset. When you want to achieve a positive result with your investments, you will have to learn how to deal with risks. It is important to recognize possibilities, to limit the risks and to maximize your profits. 

By opening a free account with a broker, you can immediately open real positions through a free demo. Every beginning is difficult, but it gets easier from there on and never forget the result is worth all the efforts! Investing allows you to actively trade without being dependent on a certain location! Investing can be learned, but you need to take the first step yourself!

Keep practicing!

You know enough to open up your first position. To become a better trader you must keep learning. Keep trading and continue learning by reading articles and following courses.

Useful links: start trading directly!