Making money online is probably one of the most popular topics for those
who want to do internet business. People need stable income and moving your job
to cyberspace seems to be a very attractive and enticing activity that presents
you with big opportunities to start making money with very little and risk free
investment.
On some occasions, the only thing you will have to invest is your time. I know
that there is a lot of scam on the topic and trading securities can often get
into this category, but it should not. A lot of famous investors made their way
to riches by trading stocks, commodities or other securities. Although, there
is too much ‘false experts’ in the field, it does not mean that nobody can earn
nice cash there. I remember entering one of financial markets ten years ago and
blowing up all of my deposit in one month. It did not feel too nice. I gave the
thing up. However, after a few months seeing some technical
patterns in one of the most famous securities I decided to give trading
another shot and I was successful that time. Lots of time has passed since that
time and I have seen good and bad times. Today I am still convinced that
trading is one of the best ways to make money.
If you are ready to trade Forex,
futures, indexes and stocks I recommend Etoro and Instaforex brokers.
How to
become a profitable trader
As any other profession this one requires a lot of time of study,
practice, analysis, making mistakes, developing your own trading systems and
style. I will try to look at some of the key points that are necessary in order
to be a profitable trader of any financial market. I have said a number of
times that anyone who invests a few hours every day for two years will
eventually become a pro in the field. I know that it sounds like a lot of work,
but if you think that you can make big money without investing your time in it
you are a victim of wishful thinking.
Understanding
specifics of a market
Firstly, you should analyze specifics of any given market. You have to
know what kind of orders you can use (long, short, limit, stop and etc.), how
big leverage you can use, how long you can keep your position, how much you pay
for rollovers, whether you earn interest or it is deducted from your account
and a few other things.
Importance
of a good trading system
Secondly, you have to develop a few trading
systems that you can apply under specific market conditions. I would advise
you to start with one trading strategy that you could use from one time a week
to one time per month. You should not trade much in the beginning and you must
use only the best opportunities that give you the best risk/reward ratio. You
should always target to make (at least) twice the amount you risk. These
profit/loss odds are minimum if you want to have profit long term. I would also advise to concentrate only on long
term and mid term trends (swing
trading) without going into day trading,
to say nothing of scalping and other similar techniques.
Follow your
trading plan
After you have developed your own trading system you should think about
a plan how you are going to trade and then follow the plan diligently without
exceptions. A plan should include quite a lot of things such as: intervals of
your trades (how often you are going to trade), technical levels (support and
resistance), fundamental news releases (whether you trade those or you stay out
of the market), possible profit targets and definite stop loss levels and a few
more.
Be a
disciplined trader
Disciplined trading is one of the keys to success in financial markets.
You may have all the other necessary things, but if you are not able to
discipline yourself and control your emotions, such as greed and fear, you will
not be able to survive in the game, to say nothing of making profits. When
traders stop following their plans they become gamblers that go into market at
the most unfavorable situations expecting that somehow they will get profitable
trades.
Learn to
control risk
Risk management is yet another very important point for anyone
interested in trading online. A lot of traders would survive and eventually
make nice money if they only risked less. But they risk thirty or even fifty
percent of their deposit on a single trade and they are completely wiped out of
the market. Again, if you are a beginner, I advise you not to risk more than
two percent of your account on any given trade. This will help you to survive
some bad times when you fail to catch profitable trades.
Become a
master of technical analysis
Understanding technical analysis is another very important thing if you
are going to be a swing trader. Support and resistance levels are probably the
most accurate tools of technical analysis that will help you to choose where to
enter and exit the market and where to place your stop loss orders. As markets
spend most of the time in ranges these levels become even more important as
securities tend to range between support and resistance levels throughout the
year, with very few exceptions when breakouts occur. That’s why you need stops.
Develop your
own trading style
Lastly, as you grow as a trader you might add a few more trading
strategies into your arsenal and develop your own trading style. Markets
change. They are not in ranges all the time. Trends do start! Breakouts do
occur on weekly basis and you might think how to take advantage of that by
developing specific trading strategies and a plan for trading these situations.
Tip: Be patient. You will be profitable if you do not give up.
If you are ready to trade Forex,
futures, indexes and stocks I recommend Etoro and Instaforex brokers.
Disclaimer
Trading
financial markets carries a high level of risk, and may not be suitable for all
investors. All information on the blog http://trend0.blogspot.com/ is of educational
nature and cannot be considered as advice, recommendation or signals to trade
in any financial markets.