How to Become an Online Trader
Becoming an online trader requires only adequate funding and a brokerage account. Achieving success depends on whether you are able to control your emotions once you place a trade and learn how to properly manage risk. An online trader education program shortens the learning curve, but the best way to become a proficient trader is usually through trial and error. Experimenting with different trading methodologies in a practice account uncovers your strengths and weaknesses. You can then decide on a trading style that best suits your temperament and begin to trade with real money.
Other People Are Reading
Instructions
-
-
1
Choose which financial market to trade. Research different financial markets to decide which instruments you want to trade, such as stocks or commodities. Learn to trade using a methodology that aligns with your investment style and determine the amount of capital you need to stay within your risk parameters. Check the websites of brokerage firms you are considering and choose a broker with a commission structure that meets your requirements.
-
2
Open and fund a brokerage account. Go to the online broker website and complete the account application forms. Make a deposit to the account once it is activated and find out how long it takes for the funds to clear. Download and install the trading software and go over the various order functions of the platform to learn how to properly execute a trade.
-
-
3
Trade small at first until you are profitable. Place a trade in the broker's practice account if one is available, or trade with a small portion of your real money account. Follow the price action as it unfolds by using the broker charts or a standalone charting program. Watch the trading platform and pay attention to how the profit and loss fluctuates in real time.
-
4
Learn to control your emotions. Exit the trade and verify the accuracy of the results in the profit and loss column of the trading platform. Keep using the practice account or a small amount of real money until you are consistently profitable. Place each trade as if you were using the full dollar amount you eventually intend to trade, so you can learn to control your emotions during the ebb and flow of the price movement.
-
5
Review your trades on a daily basis. Keep a journal of your trades and note the reason for both the entry and the exit. Do not increase the trade size until you are happy with the results. Make adjustments to your trading methodology if necessary, and then begin to trade with a larger amount once you are comfortable adding more risk.
-
1
Tips & Warnings
Write down your broker's phone number. If you temporarily lose your Internet connection, call the broker to place a trade.
Do your own research before placing a trade and ignore the hype you see on financial television shows or trade recommendation websites.
References
Resources
- Photo Credit chart image by Kit Wai Chan from Fotolia.com young business man image by Paul Moore from Fotolia.com dollars sign flying image by Pei Ling Hoo from Fotolia.com money image by Holtea Silviu from Fotolia.com Businessman having painful headache isolated image by Laser from Fotolia.com profit/loss image by Warren Millar from Fotolia.com
