The so-called traders take advantage of the natural volatility of the stock exchange. By selling assets again within a short period of time, they can also take advantage of small and short-term fluctuations. Because many traders make high profits and often successfully minimize their losses through trading strategies, trading is becoming more interesting for more and more people. The good news: Trading can be learned. The bad news: Without trading knowledge, quick trading usually does not lead to success.
Trading – Not a passive source of income
If you search the Internet for ways to earn money passively, trading is often suggested. However, trading is not a passive source of income – on the contrary: It is not possible to make high profits on the side without investing time and work. If you want to trade successfully and make money at the same time, you have to be very committed at the beginning.
Anyone who manages to acquire comprehensive trading knowledge can earn good money over time, but fast trading on the stock exchange is still labour-intensive. It’s important to know that it takes time to take the time to trade seriously and make real progress.
What can you trade?
Many aspiring traders think of stock trading first. This is probably the most original form of stock exchange trading and is still one of the most popular markets for many traders. But you can trade many more markets. These include, for example, the volatile cryptocurrencies, but also precious metals such as gold or osmion and commodities.
But the Forex market is also popular with traders. There they invest in foreign exchange, i.e. in foreign currencies, and in the best case they profit from it from exchange rate fluctuations. Because the FX market is an extremely liquid market that can also be traded almost around the clock, it is particularly in the focus of active traders.
It is also possible not to invest directly in assets, but to make profits through indirect investments. Trading CFDs (contracts for difference), warrants and other financial derivative instruments can offer good opportunities for profit. Traders can use the leverage effect. By selecting a lever and paying a security deposit (margin), the stake and thus the profit are multiplied. At this point it should be pointed out that losses are also multiplied – trading in derivatives therefore requires good financial knowledge.
Real-time trading in online trading
In order to be able to take advantage of short-term price fluctuations when day trading or scalping, traders must always keep a close eye on the stock market. This is possible because modern online trading enables real-time trading.
To do this, prospective traders open a depot with an online broker. So that everything works well, a stable internet connection is essential. Depending on how many trades you are doing at the same time, it can make sense not to trade on your smartphone but on your desktop PC. A second screen improves clarity even further.
Select the right broker
Online brokers now give you the opportunity to trade independently. Investors used to have to go to the trading floor to Pharma actions by Roche & Co to buy. Later, stock trading was handled through the house bank – with a bit of luck over the phone. Today everything is at the push of a button.
The choice of broker is crucial so that trading runs smoothly and you as a trader can get the most out of your investments. You should therefore find out more about the cost structure before registering: A free depot often does not offer all the necessary features for chart analysis, but does not incur any running costs. High order costs can greatly reduce the profit per trade – so you have to pay attention to that as well.
In addition, the broker should offer access to as many markets as possible. So you always have a good selection of possible trades. Beginners should choose brokers with a demo account to try out their strategies without risk.