You are probably here because you have already done your research regarding trading. At this stage, you are ready to start trading, but you are still hesitant because you want to make sure that you will be using the best social trading platform.
I know there are a lot of trading platforms available online. There are also a lot of strategies and tools available and that is enough to get you confused right now. Don’t worry. I’m going to discuss with you tips on how to find the right social trading platform for you to use in trading online.
Below are tips on how to start trading currencies online.
Tips in Finding The Best Social Trading Platform
1. Research Each Broker
First make sure that the selection that you have for trading is a forex trading platform. Forex means “interbank” so a forex broker is the best option for you to trade with. You can check the reputation of the forex broker by checking the reviews of that broker online. The reviews should be positive because that will indicate a positive user experience.
Make sure that it’s regulated as well. A good example is the eToro forex trading platform which is regulated by Cyprus Securities & Exchange Commission, Financial Conduct Authority, and Corporations Act.
2. Open A Demo Account
Try opening an account for free and try their demo account. eToro forex trading platform has a demo account that will let you get the feel of trading. What’s good with using a fee demo account is its risk free. It’s really very convenient because there is no risk involved when signing-up for a trading account online and using their demo feature. It’s a way for you to know if that platform is easy to use or not. Just remember that these demo account expires so you have to use all the features before it expires so you can decide which platform is good for you.
3. Check Out The Commissions and Spreads
The trading platforms are out there because they are acting as your brokers in trading. There are ways in which they can charge you. They can either get a commission from your percentage of earnings, or they will be charging you by spreads. Make sure you understand each platform well. Know how they will charge you because it can affect your earnings in the future.
4. Know the Level of Accounts in the Platform
There are different levels of investors and the trading platforms recognize this. You can choose your Forex accounts. Some trading platforms have standard, mini, and micro forex level of accounts on their platforms. Your level will be dependent on the initial investment that you put on your account and the risk tolerance that you will indicate.
For beginner trading investors I would recommend the mini account which will require you to trade with a small capital. This kind of account has a lower risk, but you will also reap lower rewards.
After you have chosen the level of investment that you will have, you can then let the system do their work. All you have to do is monitor your account.
5. Create A Basic Account
After you have deposited your capital on the forex trading platform that you chose, you need to do some planning. Just like in a regular business you need to have a plan in place. You can’t just barge in a house and declare war. You’ve got to have a strategy so that you will win.
The plan that you have should have three things: entry, exit, and money management. Entry means buying, exit means selling, and money management is the risk percentage that you can allow with your capital. Once you have your plan in place, put it into practice.
This is how a basic trading system works. Luckily, with the eToro forex trading platform you don’t have to worry about this if you choose to. eToro has a copy trade feature that will allow you to copy the movement of an experienced trader. So with the copy trade feature you don’t really need to worry about a strategy. All you need to do is to look for an experienced trader that has a good history in trading and click on the copy trade feature. After you have done that, the system will automatically copy all the movements of the experienced trader.
Don’t worry about losing, though because it has a stop loss feature. You can indicate the amount that you will allow your account to lose in case the trade of the experienced trader you are copying is not doing well. The system will automatically stop copying the movements of the experienced trader once it reaches the percentage that you indicated.
6. Have An Exit Strategy
An exit strategy is a plan on how long you want to trade. For example if you want to trade for only a short term basis then you have to aim for a high target profit. This way, you will exit with a lot of money on hand. If you will trade for a longer period, however, you can set the trade to a minimum amount so you can get profit from it gradually. Setting your exit strategy is very important in trading because this will be a part of your plan in trading.
7. Know Your Risk Percentage
The risk percentage is the amount that you will allow your account to loose in case your trade is not going well. You need to input your risk percentage so that the system will stop your trade once you reach that amount of loss in the account. This is the broker’s way of protecting the money of their traders. By putting a top loss feature, they help the trader keep some amount of money so they can trade again.
You can experiment the stop loss features in the demo accounts that you created in the various trading platforms so you know how it works. Once you are satisfied with the outcome you are then ready to trade.
Here’s a tip for you: You can change your risk percentage anytime that you want, but do not go out of your comfort zone and go all out on your money. This will give you protection and can help you trade again in case of losses.
8. Remove Emotion
Trading involves money so you have to use your brains in trading. Do not get your emotions get the better of you. Of course you are dealing with money and you want to gain from it. There may be times that you will be anxious because the trend is not going well, but you have to focus. Do not let your emotions like fear, being anxious or panic cloud your judgment in trading. You have to be prepared for anything that can happen to your money.
Be prepared mentally for losing your money and learn from the experience. Have a plan and develop strategies that can help you recover your loss. This will help you get over your emotions so you can make disciplined decisions.
9. Follow The Trend
Following the trend is recommended for beginners when trading currency online. This is very easy to use. All you have to do is open trades in the direction of the trend. First you need to decide the kind of strategy that you want to follow. The trend can be medium, long, and short. Once you determine this you will know the kind of chart that you will use in trading. I know you have already studied trading so you may already be familiar about the different charts and the trends that are very common in trading. In case, you have no idea about it, don’t worry. You can study the kind of charts used in trading and the different trends in the market by taking up a course on the trading platforms. A lot of them offer free courses that will help a beginner trader understand how trading works.
10. Have Patience
You need to be very patient in trading. Getting to the status of being an experienced trader will not happen overnight. You can take up courses in trading, but nothing will beat the learning experience that you will get while you are trading. There is always something new to learn in trading so you need to have the patience to check out the latest news and the current trend so you will know how to handle your account.
Try keeping a regular journal of what happens to your trade and study it. Identify the patterns and see where you made a wrong decision. So not just rely on the history of your trade on your account because there may be a system glitch from time to time. If you do this, I’m sure in due time you will succeed in getting more profits and be an experienced trader yourself.
Most beginner traders think that because they have taken up a course in trading, they are already good to go. Then, they will sign up with a platform that they think is the best social trading platform, but end up being disappointed. It’s really different once you have started trading.
If you do not know what you are doing trading will be a very complicated option for you. You can check out eToro forex trading platform, however. I would recommend it especially to newbie traders. Their features are easy to use and very helpful for people who lack knowledge in trading. You can do a copy trade if you are not sure about how to start trading and study the moves of the experienced trader that you have copied. I’m sure you will learn a lot from it.