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Trading: How to start from scratch

31 de octubre de 2023

Introduction:

Trading, or trading financial assets, has gained popularity in recent years as a potentially lucrative way to make money online. However, it is essential to understand that trading is not a game of chance, but rather an activity that requires education, discipline and a well-defined strategy. This article will provide you with a complete introduction to trading, from the basics to how to start from scratch, including the tools that can boost your business.

What is Trading?

Trading involves buying and selling financial assets, such as stocks, currencies, cryptocurrencies, commodities, and more, with the goal of making profits through the difference in the buying and selling prices. Traders, also known as active investors, take advantage of market volatility to make short-term buying and selling decisions.

Step 1: Education and Knowledge

Before diving into the world of trading, it is essential to acquire a solid base of knowledge. This includes understanding the financial markets, the types of assets that can be traded and the different trading approaches, such as day trading, swing trading and long-term trading. Resources such as books, online courses, and trading forums can be valuable for learning.

Step 2: Market Choice and Strategy

Selecting the market in which you want to operate is an important step. You can opt for the stock market, forex, cryptocurrencies, futures, among others. Additionally, you must develop a solid trading strategy that includes criteria for entering and exiting trades, risk management, and technical and/or fundamental analysis.

Step 3: Trading Platforms and Accounts

To start trading, you need a trading platform. These platforms offer access to the markets and tools to execute operations. Some of the most popular platforms include MetaTrader, TradingView, and platforms provided by stockbrokers. Open a trading account with a trusted broker and make sure you understand the associated fees and commissions.

Step 4: Try a Demo Account

Before risking your capital, it is wise to practice on a demo account. These accounts allow you to trade with virtual money, helping you familiarize yourself with the platform and your strategy without financial risk.

Step 5: Risk Management

Risk management is essential in trading. Set limits on the amount you are willing to lose on a single trade and use stops to protect your profits and limit losses.

Step 6: Market Analysis and Decision Making

Use technical and/or fundamental analysis to make informed decisions. Technical analysis is based on the study of charts and price patterns, while fundamental analysis considers economic events and news that affect the markets.

Step 7: Start Trading with Real Money

Once you feel comfortable with a demo account and are confident in your strategy, you can start trading with real money. Start with capital you are willing to lose and keep detailed records of your trades.

Tools to Boost your Trading Business:

  • Economic Calendar : Provides you with information about important economic events that can affect the markets.
  • Technical Indicators : Use indicators such as moving averages, RSI and MACD to make more informed decisions.
  • Financial News : Stay up to date with economic and political news that can influence the markets.
  • Trading Community : Participate in online trading communities to learn from other traders, share experiences and get advice.
  • Automation Software : Some traders use trading robots (EAs) to automate strategies.

Conclusion:

Trading is an exciting but challenging activity that requires patience, education and practice. Before committing to trading full-time, make sure you are well prepared and willing to take on the associated risks. With the right education and a solid strategy, trading can become a better business model.