Back in 1929, the stock market was solely dominated by the rich and powerful. However, after the massive market crash of that time, things became more flexible and the average Joe could now claim a stake in the stock market niche. Today, things have become even easier with the advent of the internet.
Technology has shaped how we trade stocks today and all you need is an internet enabled device, fast internet, a good financial history and tips on how to get ahead in the game. There are two ways to start a career as an online stock trader and you can read them below.
Employing a Broker
A stock market broker is someone who will be offering you advice on how to invest, invest in the stocks you tell them or manage an entire portfolio on your behalf. They make their money from the commissions they charge on investor profits.
Working with a stock market has its advantages. One, you have an experienced stock expert who will hone your online investing skills, especially at the initial stages of your business. They do all they do all the handwork for you, leaving you with fewer decisions to make and more confidence that your investments will pay off. Stock brokers work as individually owned businesses or an established company like CMC markets.
Investing on Your Own
On the other hand, you can choose to do away with the broker and manage all your online trading. By choosing this option, you also have some decisions to make that will shape your success as an online trader. You have to decide whether you are going to own stocks or just make your money by speculating on the rise and fall of their prices.
A lot of online traders shy away from stock asset ownership because of the disadvantages it presents. You will be tied down to actual stocks and always be vulnerable to market crashes or drastic price falls. Owning real assets also limit your flexibility in the number of markets you can enter or exit. And of course, the possibility of making a profit in the next hour isn’t always a guarantee.
Online traders have shifted to what is now called CFD trading. The concept was derived from gambling back in the day when punters placed bets on horses. It then picked up in the stock market world and has become a phenomenal trading option since then.
With CFD trading, you do not own any market assets thus you are not limited to the number of markets you can trade in. In fact, you can access a maximum of 10,000 markets any given day. How CFD trading works is that you only have to predict whether a rise of fall in asset price will occur. So if the bid price is 1300 and the close price is 1304, your job is to predict whether they will be a rise (1306) or a fall (1302) in the final price.
Then how do you make your money? First, you determine how many CFD golds you are going to buy; it could be 10 to even 1000 depending on the capacity of your initial capital. Now profits are calculated by subtracting the closing price from the bid price then multiplying the difference with the CFDs invested. For instance, if you predicted a 1310 rise in market price, this subtracted from 1300 gives a value of 6 which is multiplied to your CFDs. If you bought 1000 CFD gold’s, your resulting profit is 6,000.
With such a profound approach to online trading, you can almost guarantee yourself a profit each day in any market you enter. You only need to open an online trading account and start trading right away. Online trading companies like CMC markets offer free sign up and a pool of information that will guide you in your investments. So there is no more flying blind as a trader, nor do you see the need of a stock broker.
To become a successful online trader isn’t as complex as you would think. You only require a fast internet connection, an online trading account and a wealth of information that will guide your speculation. It’s possible to make profits even when the market is facing a crunch, and you don’t have to worry about depreciated value of assets owned.