The Internet is the “great global trading floor.” Trading has become a 24-hour uninterrupted activity where millions of expert and novice investors meet. In this article we tell you what it is and how to start trading easily.
Trading is the name given to trading in the financial markets for profit. How is it done? Through the purchase and sale of financial assets. What are those assets? Currencies, derivatives, stocks, stock indices, commodities or cryptocurrencies.
When the stock moves up, you have to buy low and sell higher before the trend reverses and starts to go down. In the opposite case, when the price of the traded asset falls, the trader sells the asset at a higher price and will buy it later at a cheaper price.
In short, operations or trade is the name given to the purchases and sales of an asset in trading.
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It is mistakenly believed that trading is related to short-term investments. The reality is that the deadlines depend on the different types of operation. It can be from operations of weeks, days, hours or seconds.
Trading strategies for days or weeks are known as Swing Trading. Second trades are called Scalping.
It is important to always keep in mind that the shorter the investment term, the greater the demand and pressure of the trader. Investing in weeks or days is different than trading in hours or seconds, as the shorter the period, the more alert the trader has to be.
The different types of trading are:
1. Scalping: Several operations are performed that last minutes and even seconds.
2. Day trading: All buy and sell trades are executed within the same day. That is, the measurement of the term is in hours.
3.Swing trading: The operations last several days, generally between 14 and 21 days.
4.Trend trading: It has no duration limits. As its name indicates, this trade operates following the trends towards the rise or fall of the price and the operation is kept open until a change in the price trend is detected.
If you want to increase your capital, launching yourself into the fascinating universe of trading, you can follow these simple tips and start trading with Avatrade.
1. Sometimes you win, sometimes you lose: This means that to start operating you require a minimum capital that allows you to withstand losses. Yes, no one wins all the time, not in all operations, not every time.
2. Be careful when leveraging: Sorry, I didn’t explain to you before what leverage is. Pay attention. Leverage is the option of trading with more capital than you have in your account through a temporary loan made by your broker. My recommendation is that you leverage with caution, because when the market trend changes, the portfolio becomes difficult to manage. It requires experience, nerves of steel and being a “friend” of risk in order not to stumble hard and lose all the capital.
3. Beware of deadlines: Many inexperienced investors fall into the temptation of scalping and trading often becomes your worst nightmare. My recommendation is to go sparingly and trade within 2-3 days. You should not get caught up in the siren song of trading for hours, minutes or seconds.
4. Your method, your investment: You have to be smart and be clear that consistent winnings over time cannot depend on streaks. Just as the day is followed by the night, each bullish wave is followed by a bearish one. Another tip: do not leave your capital in the hands of your emotions. Try to use logic, reason and analysis to invest.
5. Separate the chaff from the wheat: A phrase as old as valid. In times of infoxication and fake news, the internet has terabytes and terabytes of information on trading, although a large percentage is not true. Before investing, I recommend you consult with your trusted acquaintances what their experience with trading has been. I also recommend you to read, analyze and study the markets in which you want to operate.
7. Autoscan: Do not start to get into trading without first knowing what your investor profile is, how much you would be willing to lose and how long you expect to get your returns.
8. Inexperience: Put these tips into practice, read as much theory as possible and take all the courses you want, but it’s not enough. Trading is more than all that, it is about designing strategies, putting them into practice and testing them until they work.