How to start trading online

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Online business is growing in popularity as more and more people are looking for additional and convenient income options. To help newbies start their trading journey, Dany Mawas, Regional Director of INFINOX (www.INFINOX.com) – a globally recognized CFD and FX trading broker that operates in Africa – explains the main financial instruments that are of great options for newbie traders. started with.

Mawas says that while the market presents a wide range of income potentials, all novice traders should first understand the differences between FX and CFD trading, and that there are several factors to consider before deciding on their instrument. preferred trading.

FX Trading

“FX is the abbreviated term for forex, and is the instrument of international currency trading,” he says. “With the markets reacting to daily geopolitical and economic affairs, the forex market is ideal for speculating on world events and taking advantage of trading opportunities.”

Mawas points out that the forex market is exceptionally popular with traders and is the largest market in the world with over $ 5 billion traded daily. This, he says, creates an extremely liquid market and makes it easier to enter and exit at the price you want, increasing trading opportunities for all types of traders. In addition, forex instruments also provide significant leverage and volatility, making them one of the most accessible instruments for trading.

CFD trading

CFD or “Contract for Difference” is a financial instrument used to make a profit on the price change of an asset without having to own it. As such, the trader does not need to buy a particular stock or product to make a profit in the future. Instead, the contract between a buyer and seller offers traders the ability to trade on margin without owning an asset per se.

The value and movements of a contract follow the underlying asset, but note that it is not directly related to the price, which is why you may see slight differences between brokers. A CFD is a broad class of assets, with traders able to buy and sell CFDs in the following areas:

CFD shares: These allow traders to trade the stock prices of some of the world’s largest companies and most popular brands using smaller margins. In addition, they allow traders to access global stock markets and profit from the rise and fall of stock prices.

CFD Indices: Indices are one of the most popular instruments for trading and allow traders to buy and sell the value of the entire stock market in a single trade. They are a great asset for speculating on world events and diversifying an investment portfolio.

CFD products: The world revolves around commodities and commodity CFD trading allows traders to speculate on the price of assets such as precious metals, energy or agriculture. As global events shape demand and supply, speculators will seek to take advantage of trading opportunities or use them as a tool to manage their risk.

Futures CFDs: Futures contracts are standardized contracts with a fixed quantity, price and place of delivery that serve as a legal agreement to buy an asset at a fixed price in the future. Most often, futures contracts are used to trade commodities such as soybeans, cocoa, and crude oil, among others. This is another great way to market yourself in popular markets.

Factors to consider when choosing a trading instrument

Mawas says there are several factors that beginner traders should consider before investing in the instrument they have chosen, including liquidity, volatility, low transaction costs, and availability of information.

“Liquidity refers to the ease with which traders can buy and sell the instrument they have chosen, with high levels of liquidity considered easier to trade,” he explains. “The volatility of an instrument refers to its continuous rise and fall, a highly volatile instrument favoring traders – due to its higher risk and greater opportunity for profit.”

Mawas adds that traders should look for an instrument that has low transaction costs, as this will allow them to generate better returns. “You should be aware, however, that their preferred broker may charge minimal trading fees depending on the instrument chosen.”

“The best financial instrument to trade depends on several factors, and for beginners their budgets should dictate the type of instruments they trade,” he says. “Traders should also choose a broker that not only offers them support by being easily reachable with a local presence, but also offers learning resources.”

Another viable way to learn and start your business journey is through online community apps, such as IX Social. Here traders can share their knowledge, trades and experiences with like-minded people. Users are placed in the driver’s seat with the latest news, community trending topics, today’s top traders, and the latest prices all in one place.

“Its easy-to-use functionality, coupled with an auto-copy feature, allows you to automatically copy top traders and receive the same results. This makes it the ideal platform for novice traders to learn and develop, ”concludes Mawas.

Distributed by APO Group on behalf of INFINOX Capital.

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