We all can agree that online trading might seem overwhelming for complete beginners with zero trading experience or knowledge. But it’s not that intimidating, and actually, there are many benefits to it which is why many retail investors trading online are looking to improve their experience. If you are also looking to create your first online trading account and you lack the proper foundation, our article will help you take your first steps. So without further ado, let’s get right into it.
License and Online Trading Platform
The first step is to register on a reliable online trading platform. If you are confused what’s the role of trading sites, all you need to know is that they should be licensed companies that serve as a medium for online trading.
But before you register on a trading site, you need to do your research on the online trading platform. In other words, you need to make sure that the platform is secure, reliable, and has an appropriate license.
For example, if you’re playing on a UK trading platform licensed by The Financial Conduct Authority, this is a good indicator that the platform is legitimate. Next, make sure to take the time and weigh up the pros and cons of joining before you create an account. It’s even better if you can make a list of potential sites and compare their reviews, features, and offers.
In 2020, in addition, you also need to be aware of the security measures which are implemented by the trading site. Obviously, if it is a reliable company with a legitimate license, this is good enough proof that it also incorporates security measures, including SSL encryption technology, firewalls, and other measures to protect the sensitive and financial data of the users from hackers.
Because you’re a beginner, you don’t want to underestimate the need for high-quality and comprehensive educational resources. There are trading sites that are targeted mainly to experienced trades that require you to do most of the heavy lifting, and in our opinion, those platforms are not that useful for your trading journey at this stage.
Instead, you can go for a reliable trading platform that has a well-stocked and comprehensive educational section where you will learn everything you need to know about online trading, specific assets, trading strategies, and practices. For example, some of best share trading platform Australia provides great features as well as educational materials to get you on the right track. It’s also important to learn more about the educational materials which are available on the trading site, like video tutorials, how-to articles, webinars, FAQ pages, and other materials that would be helpful to you.
It doesn’t matter if you’re going to create an account on a mobile trading platform or a trading website. Every trading site out there has commission fees and other costs which are related to trading. This is an important factor that you need to take into account, especially when you’re creating your budget.
The fees may relate to account maintenance, assets like cryptocurrencies, currency conversion fees, and commission fees for using that platform. After you’ve calculated the cost of trading, you will be in a better position to gauge your risk tolerance.
For instance, if you have a conservative risk tolerance, you are not going to invest in assets that are deemed volatile, like cryptocurrencies. But regardless of your tools, you need to be aware of how much you’re willing to lose in order to gain a certain ROI. In case you have an aggressive risk tolerance, you might be willing to invest in assets that are known for their money-making potential, but at the same time, they can depreciate quickly.
So, when you’re developing your financial plan and budget, make sure to take into account the overall cost of trading on a specific platform, the assets that you want to add to your portfolio, as well as your risk tolerance. If you want to have a certain idea in mind or a line that you won’t cross as an investor, then it comes to your budget.
Types of Assets
Different kinds of assets are available online, and fortunately, you can choose from cryptocurrencies, NFTs, futures, derivates, hard/soft commodities, and many other assets. As you’ve already prepared the budget, you’ll probably have some idea of whether you want to invest in cryptocurrencies or you want to invest in stocks, commodities, or other assets.
Next, you can make a deposit which can be processed instantly based on the payment option you’re using and the payment policy of the trading site. The next step is to place an order which can be executed immediately, or it might be processed over the course of 24 hours. So, after you’ve completed all of the previous steps, you are on your way to accomplishing your financial plan.