How to trade online
What is online trading?
If you are just starting out in the online trading world it may seem daunting, AvaTrade has all the basics covered to put your mind at rest. We will teach you that UK trading online is all about controlling your own destiny, you decide how much you want to invest, when and which trades to open and when to close them.
The very root of trading online for a beginner starts with a clear understanding, that basic factors influencing market behavior and the prices are supply and demand. When supply and demand are not in sync this is when a price move is going to happen, if there are more willing buyers than there are sellers in the market then a price will go up and vice versa. This logic is simple and applies to the principles of trading currencies, trading CFDs online, etc.
With AvaTrade when you register for a live or demo trading account you will find many articles, videos, webinars and other trading educational tools that not only introduce you to the basics of forex trading, but teach you how to build strategies, learn market analysis etc.
We will get you to start compiling a trading plan, seek out what you want as a trader, what you can absorb in terms of risk, establish your profit goals and the time you can devote to your online trading.
Another element of trading online is to learn how to lose small but win big, managing your risk to reward ratio of 3:1 per trade placed.
8 Online Trading Tips to Remember
Online trading involves the buying and selling of financial instruments for gain. AvaTrade UK provides a comprehensive set of trading tools and resources for traders. As a retail trader, or a professional trader, it’s imperative to have all relevant trading information at your fingertips. Your chosen broker is your go-to resource in the financial markets. Think of a trading platform as a bridge between you and the financial markets; a real-time facilitator of transactions for traders. In terms of the best online trading tips, myriad options abound. As a relative newcomer to the scene, it’s important to put your best foot forward at all times. Much like a new driver behind the wheel, a set of rules is required to help you navigate through the complex array of financial instruments, trading decisions, and possibilities that exist. We have highlighted 8 online trading tips to remember for retail traders and professionals alike. These tips will serve you well throughout your tenure as an online trader.
- Pick a reputable trading platform – Contrary to popular opinion, trading platforms are not all cut from the same cloth. Licensing, credibility, ease-of-use, range of financial instruments, and peripheral resources are sacrosanct.
- Choose the right financial instruments – Every trader is different when it comes to picking financial instruments. As a rule of thumb, start with an asset you understand. It could be a currency pair such as GBP/USD, a stock such as Apple (NASDAQ: AAPL), commodities such as crude oil, an index such as the FTSE 100, or a cryptocurrency such as Bitcoin (BTC).
- Start with a few trades and work your way up. It’s disingenuous to open multiple positions from the get go as a new trader. Start with whatever is manageable, and gradually increase your portfolio to include more financial instruments. If you overwhelm yourself at inception, your trades may suffer.
- Set a maximum £ allocation per trade. Whether you are a new trader or an old hand at trading, this rule will protect the financial value of investments. Some experts believe that no more than 0.5% of your capital should be allocated to any individual trade. This limits your downside risk if a trade sours. A budget of £10,000 should have no more than £50 on an individual trade.
- Timing is everything. In trading, as in life, timing is critical. You have to strike while the iron is hot so to speak. Be sure to execute trades at the right price points by buying and selling accordingly. Fortunately, parameters can be set with automated trading systems to help you achieve your objectives.
- Don’t be scared to cut your losses in a losing trade. Sometimes markets turn against you. Despite your best efforts, trades can take a turn for the worse. If this happens, it’s better to set stop loss limits then to watch the entire trade whittle away into nothing.
- Read, read, read. The most experienced traders understand that knowledge is the single most powerful resource available to anyone in the financial markets. The more you know, the better a trader you will be. You can never know too much about the financial markets and the macroeconomic variables governing them.
Paper trade to get into the swing of things. Paper trading eliminates risk of loss by allowing you to trade for faux money, under real market conditions. You can use all manner of trading tools, tactics, strategies, and approaches with paper trading to maximum effect right here at AvaTrade UK
How to trade forex online?
On the simple side, a currency exchange rate is the rate at which the basic currency can be exchanged for the quote currency. These currencies are quoted in pairs, such as the widely traded pair EUR/USD that is the Euro and the US Dollar. Economic factors such as industrial production, inflation, political events, etc. influence these exchange rates. These factors are the main market influencers for whether you buy or sell a currency pair.
A more practical example of a forex market is illustrated as follows:
In this example of the EUR/USD the EURO is represented as the base currency and the USD as the quote currency, and it represents the number of US dollars that one euro can purchase. The quotation of EUR/USD 1.2000 in numbers means: That one euro is exchanged for 1.2000 US dollars.
If you believe that the euro will increase in value against the US dollar over the next 48 hours, you will BUY the euro. Should the exchange rate rise in your favor you would sell the euros back at a profit. Basically, this is how profits are made when you trade online.
Why would you trade online currencies?
As forex trading is now known as the world’s largest market, with 24-hour operations and over 3.2 trillion traded in US dollars on a daily volume. There are a few differences between the forex and the equities markets and where AvaTrade is your broker:
- There is no commission charged for trades with AvaTrade you only pay the bid/ask spreads
- 24 hour 5 days a week trading, so you manage and control when and how you trade
- AvaTrade offers up to trading leverage to magnify any potential gains
- Over 250 instruments to trade on which include Forex, Avatrade’s trading platform, CFDs for stocks trading, commodities & indices
- You can get started with only and gain all the training and customer support in your language
How to perform a trade online
Choosing the right broker to trade with is the most essential of all your choices when it comes to online trading. We offer you a free demo account and many forms of educational information alongside direct interaction from any of our customer support agents should you require further services.
- Open your online real account, provide your banking and personal information that is totally secure, and without any commissions and fees. Now that that is covered let’s execute your first trade.
- After you have conducted your research and, in case of need, consulted with our team, head over to the trading platform where you can open a position on the chosen instrument. You will also be able to see the spread, and how many units you wish to buy on an implemented leverage (of your choice). Remember to start small and build up when you get the hang of trading online . It is important to use stop loss orders each time you open a trade.
- Once your trade is opened you will need to monitor your investment and keep abreast of their performances. Should you see a decrease in the activity and the markets are trading against you, you should consider a sell, or wait for the stop loss to kick in to limit the damage on your account.
- Making changes to your portfolio from time to time is advised, you are constantly exposed to emerging markets and you can decide to diversify your trades. Whatever the case, follow your strategy, and do not over trade.
- Should your trade make a profit covering your goal, close it and take the profit. Executing a withdrawal request is simple and easy and can be done via the platform.
Learn how to trade online with AvaTrade
Want to learn how to trade forex? Potentially increase your gains on the financial markets?
AvaTrade will teach you how to master forex trading online .
Enter to read about the popular Metatrader 5 and metatrader 4 platform and get to know all the tools of the trade at your fingertips. there is no reason for a delay.
How to trade online main FAQs
- How can I do trading online?
In this day and age doing trading online is a simple proposition as long as you have stable internet access and a bank account or other way to fund your trading account. You’ll find that there are many online brokers offering access to trade on stocks, commodities, forex, indices and bonds. And they make it quite easy to open and fund a trading account. Of course, you’re already here on the AvaTrade website, so why not simply get started trading with us. Just click the button above on the right to Register Now.
- What skills do I need to trade online?
You might be surprised to learn that you really don’t need any skills to get started online. Instead what you need is the desire to trade and the drive to learn how to trade better. As you begin trading, you’ll need to read a lot, but that’s ok because there are loads of great books available that can teach you about trading the markets. As you become more experienced, you’ll want to focus more on the various types of market analysis, like technical chart reading, and fundamental economic analysis. Finally, you’ll add risk management and money management techniques to your arsenal of trading skills.
- Is trading online safe?
In general online trading is quite safe. Online brokers spend plenty of time, money, and other resources to ensure that their trading platforms remain safe and secure. In addition to the steps being taken by the brokers you should also do your own part to keep your online trading account secure. As long as you’re using common sense and avoiding potentially sketchy websites and brokers, you’re almost certain to be safe when trading online. And when you think about the profit potential any threats are more than offset by the potential benefits to be gained from online trading.