There are different types of online trading and in this article we want to talk about just this: the various methodologies for trading, so that we can help you decide which one is best suited to your needs.
But starting from the 90s onwards, thanks to a more widespread use of the internet and ever faster computers, more and more people have been able to approach this world.
Investing in the stock market before the 90s was the prerogative of large investors only, and to operate, the only way was to rely on a personal broker.
Trading how it works
Much trading also depends on your personality and psychology. Depending on how your mind works, you will need to prioritize one style over another to be successful. However, there are ways to educate yourself and find the best tips or strategies to make the most of your trading experience.
Most of the trading experience works as follows:
- You create an account with a brokerage firm or an exchange
- Once you are familiar with the platform, make your initial deposit
- Once the funds are in your account, you are ready to start trading.
Here are the most popular styles, types and ways of trading:
Forex trading refers to the largest financial market in the world, namely that of foreign currencies, which is open 24 hours a day.
Forex trading stands for Foreign Exchange market. This market differs from the classic stock market, as it does not physically have a real headquarters. It is therefore a virtual place, where the main currency pairs from all over the world are exchanged, using the so-called "exchange rate".
Among the most profitable forms of speculative investment, there is without a doubt commodity trading.
Commodities or raw materials are all that can be easily transported, are not perishable and can be treated in a standard way. A large part of all transactions that are carried out on the financial markets every day are in commodities.
Thanks to commodities trading, many operators are able to obtain very high earnings. And we are not only talking about operators who make this profession. Even those who have just started can benefit greatly from commodity trading.
For those who wish to trade online, this is certainly one of the most interesting markets, namely that of commodities.
CFDs, or rather contracts for difference, have become very popular tools in recent years. These allow traders to invest in stocks, currencies, indices and commodities.
Thanks to CFD trading it is possible to buy a contract through a financial broker, without buying the underlying asset directly. For this reason, since it is not necessary to really own the assets, we operate independently of the market.
CFD trading therefore offers greater flexibility than traditional trading. CFD trading offers direct access to overseas markets, short selling, fractional shares and trading with large leverage.
This is a trading strategy, which as the name suggests, is executed within the same trading day. It used to be only available to professionals, but now that it is available to everyone, it is the most popular form of trading on the planet.
The most popular cryptocurrency in the world is definitely Bitcoin. The reason is very simple, it was the first cryptocurrency to be launched on the market and still is the one with the highest market capitalization.
Trading Bitcoin means obtaining a profit, the highest possible, by speculating on the price variation of the cryptocurrency, reducing any risk to a minimum.
Obviously, trading is a particularly speculative financial activity, where traders enter mainly for a simple and quick gain, therefore, they tend to open and close positions within the same day (day trading).
Copy Trading and Mirror Trading
In the world of online investing, mirror trading is a rather new tool. As the name of the tool suggests, mirror trading is very similar to what a normal mirror does, i.e. reflect what you see from the other side.
Copy trading is very similar to mirror trading. Let's say that it is more its direct evolution. In this case, however, the trader himself will decide whether or not to follow the actions of the professional trader, so there will no longer be a 1: 1 replication of the operations.
This is a very interesting investment technique both for diversifying their investments and for traders who are still beginners, who however wish to have greater freedom of decision.
Automatic trading is performed through trading apps that allow you to invest a capital and then let it be managed directly by a bot.
Typically an auto trading bot scans the markets for profitable trading opportunities and then generates a signal. Thanks to modern algorithms, bots are able to perform technical and fundamental analysis of the markets and are very precise.
Once a profit opportunity is identified, the bot generates a trading signal, which the platform automatically follows by opening or closing a certain position.
In recent years, automatic trading is spreading a lot thanks to excellent online platforms. In this way, general trading has become accessible to everyone, even those who do not have the time to monitor their assets 24 hours a day. Good examples of trading robots are the Bitcoin Revolution and Bitcoin Trader.
Trading applications are offered by several online brokers, which allow their clients to trade anytime they want and wherever they are.
The best are probably the ones to download to their mobile devices, such as smartphones or tablets, but many operators prefer to use directly web-based software that adapt to the screen of any device.
The possibility of not having to download any software on their device is also very appreciated by operators, thus preserving the memory space for other files, videos, images, etc.
In general, almost all brokers now offer their customers trading apps with which to monitor their orders, finances and make deposits and withdrawals with a click.
How to start trading and which strategy to choose
Now that we have presented almost all the strategies and methods for trading, let's try to understand how to trade and what could be the most suitable trading strategy / method for your needs.
- Among the many strategies listed in this article, there are some that are certainly more advisable than others for beginners. In some cases, the best thing to do may be to rely on automated trading platforms, minimizing risk and trying to learn only the best.
- Certainly other very profitable strategies that are worth following carefully are mirror and copy trading (and consequently also social trading), which allow a more in-depth analysis of the markets, exchange ideas with other people and follow the signals. of professionals.
A little more complicated is currency trading or CFD trading, which present probably even greater and faster earning opportunities, but which also carry great risks. One piece of advice we can give you is definitely not to start by investing a huge amount of capital, nor money that you cannot afford to lose.
It is very important to know that investments can always, regardless of the chosen strategies, risky and therefore can lead you to the total loss of the invested capital. If you need the money you want to use for trading to pay rent and utility bills, you shouldn't invest it this way. Use extra income to earn money that can add to your base income in the future. Finally, only the best and those with a little more luck can be successful and create a real income to live with.