You may not start off being the Warren Buffet, or a famous Wall-Streeter today, but you do certainly need a set of tools, and knowledge to embark yourself onto the right path.
On this journey, let me tell you – Investors have a wide range of trading options to choose from and important decisions to take. Some penchant short term trading options, while others may fancy undertaking the less risky, long term trading strategies.
With internet access becoming pervasive, it is interesting how easy it is to trade online. Here are 3 interesting ways in which you can start your journey to becoming the next billionaire trader:
(P.S. Each type of trading has its own merits/de-merits and the type of trading strategy often depends on funds available, the research methods a trader uses and their willingness to accept certain risks.)
Trade in Cryptocurrency
It is a trade wherein there is an exchange of cryptocurrencies such as bitcoin, Ethereum etc with the intention of buying a coin that has an increased value. A global exchange such as Coinbase, Bittrex, Binance generates a commonplace for buyers and sellers to trade and in return charges a nominal fee for the process. Also, the exchange provides a wallet for storing the Cryptocurrency.
Further, there are two kinds of trading – short and long term.
Short term trading benefits by taking advantage of the strides in the short term pricing shifts by moving in and out of a trade quickly. Given that Cryptocurrencies experience a lot of surges and troughs within a few hours or a day – close monitoring of the same can help a vigilant trader in extracting a lot of profit with a minimal starting bankroll amount.
In contrast, there exists long term trading where the hold on a Cryptocurrency is for a longer tenure before selling it. The aim is to reap – long term growth in the price – benefits of the coin without having to understand the trending trade charts.
CFD Trading
CFD or contract for difference is a type of derivative trading that occurs on the difference amount of financial market instruments such as shares, currencies, treasuries, indices without actually owning any assets. It is a contract between the buyer and seller wherein the seller pays the buyer the difference between the price at the time of contract and current asset price. In case it is negative the buyer pays the difference instead.
Benefits can be driven from a CFD trade unlike in a traditional trade scenario that profits only when a market rises in price. CFD can be used to gain profits by opening a CFD position that will profit with a decrease in price – called as selling or going short.
Also while trading through CFD you can continue with the trade without having to pay the entire cost of the asset at the time of opening.
Day Trading
When the speculation and hence the buying and selling of financial instruments occurs within the course of the day – it is known as day trading. Mostly the traders wind up their trading positions before the end of the day to avoid the repercussions that could come from deteriorating rates after the close of the day and the next morning opening of the same. In recent years, the Internet, tech, and tools like the white label trading software have enabled non-professional traders to dive into this new domain of earning extra income.
There exists CFD trading websites to enable non-professionals to study and carry out trade. Different types of Day Trading include – Price Action Trading, Momentum Day Trading, Market Making, News Trading/Playing, etc. to name a few. Day trading leverages the benefits of short term trading techniques to derive profit magnification caused by minimal price movements of highly liquid stocks. However it involves substantial risk and a thorough understanding of the trend and anchor movement of the securities.
Now, the above 3 methods are only among the few popular online trading methodologies out there. However, do explore in great detail on other methods before you take your steps onto the journey to master this trade.
Always, remember this famous quote –
We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.” and “Price is what you pay. Value is what you get.
– both by Warren Buffet
Only money can make money – the wiser decisions you take today, the wealthier life you’ll lead tomorrow. Good luck with your first trade!
