Mastering the skills needed to survive requires commitment and years of practice. However, with the right tools, you can improve your chances of getting off to a good start. Therefore, we’ve collected a top three list of things that you need to equip yourself with before you start trading.
Broker and App
Your online broker will act as the middleman between you and the financial markets and finding the right broker is a crucial factor to succeeding. Most important is to find a legally operating broker that is fully licensed and regulated. In Australia that task falls on the Australian Securities and Investment Commission (ASIC) and in the UK on the Financial Conduct Authority (FCA). Hence, the first step is to find a regulated broker.
In addition, there are several factors to consider when picking an online broker, such as the platforms provided, the markets you can trade on, fees, availability, reputation, etc. The easiest way to collect all this information about brokers is to rely on professionals. There is a range of websites that provide detailed and unbiased broker reviews. Also, many times the best brokers in Australia are the best online trading platforms in the UK, meaning you can look for brokers based on both markets.
Today you also need to find a broker with a great trading app so that you can trade whenever you have to. This way you can close positions at any time and make use of unique opportunities that present themselves even when you’re not in front of the computer.
Budget and Risk Strategy
Before you even make your first deposit to a brokerage account, you need to consider all the risks. Some risks can be avoided by, for example, using a regulated broker. However, you will always run the risk of losing your invested funds.
The best way to handle this is preparation. By having a strict budget that doesn’t affect the rest of your life, and by implementing basic risk management strategies, you’ve come a long way.
Basic risk strategies include never investing money you cannot afford to lose, diversifying your portfolio across different markets, activating stop-loss features, and more.
Furthermore, the best risk management is always knowledge and experience, and the better you get at trading, the more control you get over potential risks.
Another tip we want to share is the potential benefits of using automated trading and copy trading features. Technology is a major part of online trading today and there are a few decent tools to help you trade more efficiently.
Forex robots are a typical example of a tool that helps you trade forex automatically based on your or the robot’s parameters. The software then opens and closes trades based on certain price points and currency pairs. By using robot’s you can limit the time that you need to spend in front of your trade station. You can technically make profits while working.
Copy trading is a similar way to trade, but instead of trading with software, you copy another actual trader. This way you can avoid a lot of the analytic work needed to trade and you can increase your potential of making a profit.
Naturally, both of these methods of trading come with additional fees. In fact, copy trading can be quite expensive when using certain brokers.