There are different types of online trading and in this article we want to talk about this: the various methodologies for trading, so that we can help you decide which one is best suited to your needs.

But from the 90s onwards, thanks to a more widespread use of the Internet and faster and faster computers, more and more people have been able to approach this world.

What is Trading?

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The literal trading translation is negotiation. Choosing the style of negotiation that best suits your preferences and personality is very important.

In terms of opportunities, the world of trading is particularly varied and thanks to this, many trading styles can be applied.

Investing in the stock market before the 90s was the preserve of only large investors, and to operate, the only way was to rely on a personal broker.

Trading how it works

Much of the trading also depends on your personality and your 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 experience in Trading works in the following way:Types of Trading 🥇Best Beginner Trading Guide - finance 04 512

  • You create an account with a brokerage or exchange company
  • After getting 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 to trade:

Forex Trading

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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 equity market, in that 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".

To understand how it works, here is a practical example:
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  • If you leave for a foreign country where a currency other than yours is used, you will have to exchange it for the local currency.
  • If you do it in any financial institution or in the exchanges below the airport, here in that case you just traded forex.
In this market, traders can invest at any time of the day, regardless of the time of day, but except on weekends. Investing in this market means speculating on price fluctuations between currency pairs. a great trade to start trading forex today is eToro.

Commodity trading

Among the most profitable forms of speculative investment, there is undoubtedly commodity trading.Types of Trading 🥇Best Beginner Trading Guide - depositphotos 114881620 stock illustration vector line concept stock exchange

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.

CFD trading

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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 purchase a contract through a financial broker, without purchasing the underlying asset directly. For this reason, since it is not necessary to actually own the assets, one operates independently of the market.

CFD trading therefore offers greater flexibility than traditional trading. CFD trading offers direct access to foreign markets, short selling, fractional stocks and trading with broad financial levers.

Day trading

This is a trading strategy, which as the name anticipates, is performed within the same trading day. Previously, it was only available to professionals, but now that it is available to everyone, it is the most popular form of trading on the planet.

Why is this form of trading so popular?
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Day Trading is a very popular strategy among traders and involves opening and closing the same position within a relatively short period of time.

Simple, since it theoretically allows you to make a lot of money, in a short space of time. Also for this reason there are many beginners who approach it. Many online brokers offer the possibility of day trading.

Bitcoin trading

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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 it is still the one with the highest market capitalization.

Doing Bitcoin trading means getting a profit, as high as possible, speculating on the price change of the cryptocurrency, reducing any risk to a minimum.

Obviously, trading is a particularly speculative financial activity, where traders enter above all for a simple and fast gain, therefore, they tend to open and close positions within the same day (day trading).

How to start Bitcoin Trading?
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  • Create an eToro account
  • After registering for an account, click on the deposit button
  • Make an initial deposit to add trading funds
  • Once the funds are added, look for the cryptocurrencies to buy on your "favorites list"
  • Click the "B" or "S" button to make the first trades
Certainly the best thing to do is not to buy Bitcoin directly, as many might think. In fact, if Bitcoin goes up, there is a profit, but if it goes down, you risk losing everything. That's why it is very important to trade with regulated platforms like eToro. In this way, you will ensure that your funds are always safe.

Cryptocurrency trading done with automatic programs, on the other hand, allows you to make a profit, regardless of the direction of the price of the crypto currency.

Copy Trading and Mirror Trading

In the world of online investment, mirror trading is a rather new tool. As the name of the instrument suggests, mirror trading is very similar to what a normal mirror does, that is, to reflect what you see on the other side.

Copy trading is very similar to mirror trading. Let's say that it is mostly 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 replica of the 1: 1 operations.

Types of Trading 🥇Best Beginner Trading Guide - copy trade

This is a very interesting investment technique both for diversifying your investments and for beginner traders, who however want to have greater decision-making freedom.

To understand how Copy Trading and Mirror Trading works:

Put simply, it means that if a trader opens a position with 100 euros in his main account, the same will happen in the account that copies the trade. But much also depends on the capital invested by the two.

Since beginners love this way of trading, the modern trading platforms offered by brokers allow you to customize this tool a lot.

When the broker that offers copy trading decides to also include social features, such as communication between traders, on its platform, copy trading is defined as social trading.

Novice traders can therefore achieve prolific results through copy trading, whether or not they follow what more experienced traders do. However, it must be remembered that this does not mean safe gain or even that there will never be losses. Even the best can make mistakes.

Automatic trading

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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 automated trading bot analyzes the markets for profitable trading opportunities and then generates a signal. Thanks to modern algorithms, bots are able to perform technical and fundamental analyzes of the markets and are very precise.

Once a profit opportunity has been identified, the bot generates a trading signal, which the platform follows automatically by opening or closing a specific position.

In recent years, automatic trading has been spreading a lot thanks to excellent online platforms. In this way, general trading has become accessible to everyone, even to 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 apps

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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.

It is also highly appreciated by operators the possibility of not having to download any software on their device, 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 recommended than others for beginners. In some cases, the best thing to do would be to rely on automatic 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 bit more complicated is currency trading or that of CFDs, which present probably even greater and faster earning opportunities, but which also carry big risks. One piece of advice that we can give you is certainly not to start by investing a huge amount of capital, or money that you cannot afford to lose.

Recommended to start:

Types of Trading 🥇Best Beginner Trading Guide - Business Analyst

First of all, to start you should take a trading course. Online there are a multitude, both free and paid. We definitely recommend beginners to start with the free ones, for a general smattering of trading.

The advanced ones are generally paid for obvious reasons and therefore are advisable to those who already chew a bit of finance & markets and want a deeper understanding of the topic.

Many online brokers like etoro offer trading libraries to be consulted freely or upon registration and even demo accounts to learn the basics before starting. A very important thing to say is: nobody can get rich by trading, hoping to earn without knowing it. Knowledge, study, time and sweat are the pillars of this sector.

It is very important to know that investments can always be risky, regardless of the chosen strategy, and therefore can lead to the total loss of the capital invested. If the money you wish to use for trading is used to pay rents and bills, you should not invest it in this way. Use extra revenue to earn money that may be an addition to your base income in the future. Finally, only the best and those with a little more luck manage to succeed and create a real income to live with.