Investors Guide: The 2 Best Trades to Get Into as a Starting Trader!
Trading is now one of the most popular ways to make money and it’s no surprise why. It’s fast money, good for the economy, flexible, open to all and most importantly lucrative making it desirable to all sorts of people.
So whether you’re a college student, a businessman, an office assistant and so on, trading is something you can consider since there are no qualifications for people to start. All you need is to meet their minimum capital deposit and you’re in.
So if you want to become a trader, start by choosing a trade to get into. Picking out your first trade is important so make sure you stick to the right market for you. To narrow down your options, down below is a list of the best trades for starting traders:
1. Forex Trading
Forex trading is the exchange of foreign currency so you exchange a currency with another, so it’s traded in pairs. How Forex trading works is, you speculate on a currency’s market value to make a profit.
Since it’s traded in pairs, you trade a base and quote currency. A base currency is a currency you’re buying and the quote currency is the currency you’re selling. One of the most popular pairs in forex trading is EUR/USD.
So your main objective as a Forex trader is to speculate on a currency’s market value and create a strategy around it. Sell a currency you think will decrease in value in the near future and buy a currency you think will increase. This is so you can buy low and sell high later on.
Plus what makes trade all the more desirable is not its popularity but that it’s open 24/7, uses a decentralized system, is always relevant, is one of the most liquid markets and is also one of the most profitable.
How Do I Start Trading in Forex Trading?
1st step: Learn about forex trading, its market and everything it entails.
2nd step: Pick out a trading strategy that suits you and stick to it.
3rd step: Choose a trading platform that offers great Forex options.
4th step: Practice, practice, PRACTICE!
5th step: Open an account and start trading!
2. CFD Trading
CFD stands for Contract of Difference which is a financial derivative used to trade certain assets. With CFD trading you can even trade with forex and other common trades like stocks, commodities, precious metals, indices, cryptocurrency and more.
How CFD trading works is, you speculate on an asset’s underlying value in the near future. So this means you don’t own the assent physically, only its underlying value. This is highly appreciated by tons of traders since they don’t have to worry about storage and security.
So CFD trading involves two trades; the first trade being the base trade that opens a position. The quote trade is what closes the trade, through a reverse trade with a provider at a different price.
If the base trade is a buy or long position, the quote trade is a sell. But if the base trade is a sell or short position, the quote trade is a buy. So you profit from the price difference between the two trades. And, look out for interest and commissions since this can affect your income.
How Do I Start Trading in CFD Trading?
1st step: Learn about CFD trading and know its market like the back of your hand.
2nd step: Pick out a market(s) you want to start trading in.
3rd step: Come up with a trading strategy that fits your trading style and stick to it.
4th step: Look for a trading platform that offers great CFD options.
5th step: Practice! You can do so with demo accounts found on trading platforms.
6th step: Open an account and monitor your position.
Now that you know the 2 best trades to get into as a trading trader, you can make an accurate decision when choosing. Forex and CFD trading are by far the best trades to get into simply because of their relevance, liquidity, leverage and how lucrative they can be.
Although, before getting into these trades, or any other kind of trade, make sure to know a good sum about it, always be cautious and take advantage of trading tools and risk management!
And in trade, you’ll surely face failures throughout your career but know it’s completely normal! If anything, use those failures and turn them into lessons. They can benefit you and can help you fix any loopholes you might have in your strategies.