Start trading in 3 easy steps
Trading is simple, as long as you know what you are doing. A lot of websites use difficult terminology and try to scare off beginners. That’s not how we operate! Trading needs to be fun and we would love to help you get started. On this page you’ll find a range of useful articles that you can read when you want to start trading. There is also a very handy three-step plan you can use to become a successful trader.
Roadmap for starters
Trading is the process of buying and selling financial instruments to make a profit. You can trade in Forex, stocks, commodities and index funds. A lot of people think that trading is hard, and that you need a lot of money to generate a decent profit; this is not the case. In this article we will discuss how you can start trading.
Why start trading?
- Get great results, even with a small investment.
- You can always make money, for example, by short selling when the market goes down.
- By using orders you can automate your trades.
- Thanks to leverage you can get even better results.
- You can start trading completely free!
Tip: Take a look at our simple course on trading in CFDs.
Tip for the smart trader
If you want to obtain good results as a trader, it is wise to start out with a free demo account with a broker like Plus500. Plus500 offers user friendly software that anyone can use to start trading. With a demo account, you trade with virtual currency. You start with a certain balance and you can choose to open and close positions just like you would on the real market. But if something goes wrong, you won’t lose any real money because you are merely practicing with fake money!
How does trading work?
The fundamentals of trading are pretty simple: you buy or sell something to consequentially buy or sell it again to gain a positive result. Thanks to the introduction of several online brokers, it is now possible to both buy and sell; this makes it possible to earn money in both uptrends and downtrends.
For example, if you think that BMWs stock is going to go down because the German consumers are losing faith, you can decide to sell your shares in BMW. We call this shorting and you make money as soon as the price goes down.
The good part is that you can obtain a positive result no matter what direction the market is moving in. With this new form of trading, you only need to decide if you want to buy or sell and at what exact moment. When the position is open, profits and losses are tracked in real-time and as soon as your position closes your profits or losses are final.
In the last paragraph we talked briefly about the fact that news reports can have an effect on the price of stocks and currency pairs. It is also possible to trade by recognizing patterns in the charts. To do this you need some insight, and by practicing you’ll quickly get better at recognizing these patterns. A lot of people who start trading learn to recognize patterns quite quickly and know when it is the best time to open a position.
At the end of the day, trading is a game of supply and demand where a trend reversal means a shift in mental representations. A price can decrease rapidly and can rise again from a low value, that is if there are (new) buyers at the new price.
Patterns can even be recognized without any complicated technical analysis. On every graph there are lines that a price seldom crosses; we call those horizontal levels. By taking these levels into account and basing your trades on them, you can make a profit 70 to 80 percent of the time and that is plenty!
Trading is fun, exciting and most of all very profitable. As a beginning trader you need to get used to some terminology, but don’t let this stop you. As soon as you’ve made a couple of trades with a broker, you will become a good trader in no-time. Every trader started somewhere; when are you going to be ready?
Articles about trading