It’s no surprise that trading has become one of the most popular methods of gaining an income at home. People can rake in ridiculous amounts of money per week from successful trades, and it’s possible to start from a humble sum of money in the double digits. Sure, it takes a while to start and there are many different types of trading to learn when it comes to investments, but it’s a great way to expand your portfolio and there are some relatively safe ways to trade.
So whether you’re eager to get your feet wet in the trading world or if you want to brush up on your knowledge before you set off into the wild blue yonder, here’s some guidance that can be applied to all forms of trading.
Accept Your Losses
There’s nothing wrong with losing out on a trade or failing to make money. There’s a saying among trading communities: “Everyone’s a loser”. In other words, everyone will lose at some point, but it’s up to you to control how much you win as opposed to losing.
There isn’t a single trader in the world that has traded for more than a year and hasn’t experienced a single loss on their record. Whether it’s a small loss or a big one, you need to be mentally prepared to lose now and then.
Just keep in mind that as long as you’re on the green with your trading account, you’re still making a profit. Start small and work your way up, don’t hesitate to use just a small percentage of your funds every day and keep a calm and collected mentality whenever you trade. If you lose, shrug it off.
Learn from it and ask yourself why you failed. Stop trading for a moment if it really affects your mind, then take a look at the numbers, read up on the news and try to discover why the price fell. As long as you love your losses and learn from them, you’ll become a fine trader in no time at all.
Understand Your Broker
Every brokerage has different conditions when you sign up with them. Opening an account might require a minimum deposit that could be three or four digits, so make sure you carry enough money in your bank account to start one up.
It’s never a bad idea to read up on the small print as well. Understand all the terms and conditions so that you won’t be caught off guard. Online brokerages don’t require much of a deposit at all, and they might even offer you free trading accounts to try out before you invest real money.
There are many brokers on the internet that specialise in different types of trading. For example, a forex broker will, as the name implies, specialise in trading foreign exchange. There are some platforms that offer multiple types of trading as well, but it’s a good idea to research on every broker that you want to trade with and make sure they are getting positive feedback and reviews from traders.
There are many trading communities around the internet that you can join to discuss strategy, brokers and even let off steam or gloat about your trades.
It’s Not Gambling, so Don’t Treat It Like a Casino
You might be wondering about the similarities between gambling and trading. After all, you’re investing money into something with different odds, and you might end up losing your money or making a big profit. It’s undeniable that it feels like gambling, but if trading is gambling then so is starting up your own business venture.
What many people don’t realise is that trading needs to be set up and thought of like a business. You’re investing money into something specific with the hopes of getting a return—not rolling a dice.
You can’t research the cards at a blackjack table and look at their track record or the industry they are in. With trading, there’s more to it than just face value. You can read the market, you can analyse different statistics to make smart decisions and, best of all, you can pull out of a losing trade to minimise your losses.
Know Your Limits
If you haven’t already, then you need to separate your trading and personal accounts. Never trade money you can’t afford. The money you spend trading should be separated from your daily necessities such as rent, bills and food costs.
The best way to do this is open a new account, deposit a large sum of money into it, and then work off that. Any profit you gain should be made from this initial deposit. Treat it like your lifeline and never add any more. Traders, even beginner ones, will be able to make a profit as long as they are disciplined and patient.