Nowadays, there are many trading sites available to everyone. However, it is necessary to have a good foundation in order to succeed in these market operations and earn money. Trading is indeed not as simple as it seems. It requires unparalleled knowledge and learning. It is also important to choose the right broker to carry out the transactions. Yet does it have good press in the eyes of the general public?
Development of online trading
Commonly translated into French as “market operations”, trading corresponds to the various interventions carried out on financial assets. This may correspond to buy orders or sell orders. Carried out by traders, these operations can concern all financial assets, whether stocks, indices, forex or bonds.
Trading is practiced in a stock market or financial institution and is most often done at the auction. However, with the development of many websites dedicated to this field, these operations are increasingly done online. It is therefore essential to know how to train well in the profession of trader and choose your broker wiselywhich corresponds to a financial broker serving as an intermediary in order to carry out these purchase or sale orders.
Which trader are you?
Different types of traders exist in finance. Let’s take a look at each of them.
The individual trader
Many of you have at one time or another had to buy shares in a company with your own funds. This category thus includes simple savers who have no structure and act in their soul and conscience. If you want to become a retail trader, you need to open an adapted account such as the PEA (Stock savings plan).
The commodity trader
This is a professional who acts on the prices of raw materials (oil, cocoa, gold, etc.) on the financial markets. He can either use his orders for personal purposesor exchange them with the industries concerned by one of the raw materials.
The bank trader
This finance professional works with bank money in the financial markets. This is where large sums of money are raised due to capital means.
This category includes many professionals in the trade. Acting with their own money, both institutional and independent traders must be perfect in their approach to market operations.
Where to trade?
There are many options available to master trading and thus be able to know the basics of this field.
Go through a trading site
Connecting via a trading site is the best solution for carrying out your market operations. Thanks to the development of many websites in the field, becoming a trader has become more accessible. These sites offer aids and guides in order to better understand trading and better control it.
By using specific platforms like MetaTrader 4 or MetaTrader 5, your trading approach is made easier. Thanks to these brokers, you can also develop your skills by choosing a demo account for example. On this one, you won’t have to use your real money directly. This will allow you to better understand trading before jumping right in. Most trading sites offer access to various financial assets (Forex, shares, commodities, etc.) and various forms of trading. These can range from automatic trading to social trading, including options trading. You can choose the area that suits you and interests you.
Train yourself in online trading
To better understand the profession of trader, it is important to be well trained. Online brokers have understood this well by offering many explanatory materials so that you become a reputable trader. On these sites, there are many sites and videos that will allow you to master trading without having studied in the field beforehand. Through explanatory videos, you will know at your fingertips volatility, market approach or even complex financial instruments.
Trading sites also list a good number of guides to have a best approach to trading. This will allow you to work more serenely in this area. Offered by finance professionals, these courses are ideal for people looking for professional retraining.
Learn trading in a specialized school
Finance professionals are generally recruited from business or engineering schools. These establishments allow a detailed control of all the mechanisms of trading. With a training in bac +5, you will have all the necessary elements to know the scholarships, financial markets or financial strategy. At the end of your course, it is highly likely that you will reach a position of great responsibility and that you will be a pro in economics and finance.
These specialized schools require excellent knowledge of mathematics. You will be able to carry out an MBA trading without too much difficulty. If you choose the university route to become a trader, this is also possible. You can complete a master’s degree in finance, mathematics or even economics in order to improve your knowledge. The path will be more tortuous than a specialized training in trading, but you can still achieve your goals.
Many steps are necessary in order to approach the profession of trader.
Choose the best broker to trade
The first step is to choose the right broker in order tolearn to trade. Many sites exist and will provide you with the help and advice you need to master this area. You also need to know what form of trading you want to do:
- scalping: this is short-term trading where small profits are made at the best time of day.
- Day trading: recognized style for novices, it is very popular and focuses on technical analysis (graphical representation), fundamental (overall financial situation and other important indicators) and economic news.
- Swing trading: Also known as position trading, it focuses on market sentiment and fundamental and technical analysis.
There is also automatic trading, where interventions are carried out by robots instead of human and high frequency trading, for profit. Thanks to these websites, you will be able to define which style is best suited to your desires and your needs.
Opt for quality training
As previously mentioned, it is important to choose a training adapted to their needs in order to improve their knowledge of trading. You will thus have better control of your investment strategy and will have a perfect understanding of the financial markets. You can choose the same site to train online and start trading.
Open an account on the broker
Once you have chosen your platform, you can open an account to start trading. You will be asked for a lot of information in order to be able to validate your account. This is your first and last name, your username, your email address, your password or your telephone number. To validate this account, two documents will be necessary, namely an identity document (identity card, passport, driving licence, etc.) and proof of address less than 6 months old. After providing these documents, you will be able to experience trading with a demo account.
Get started on a demo account
Many platforms offer you to open a demo account to practice trading. With this tool, you don’t need to put your money directly online. You will be able to master the different concepts such as the leverage effect or the spread (difference between the buy and sell price) for example. This is very useful in order to fully understand trading through practice. With a demo account, you have a basic amount of money that you can use to perform market trades. You will be able to understand the different features of your broker more easily.
Deposit a sum of money into your account
Once your training is over, it’s time for reality. Each trading site requires a minimum amount to be deposited in their account in order to get started. Deposit your amount of money, choose your payment method and you are ready to start trading. It is often advised to have an adequate account such as a PEAlife insurance or even a title account to be able to get started.
Make your first stock purchases
Once your account has been funded, you can carry out your first transactions. Whether in the stock market, Forex or other financial assets, use all the tools and knowledge you have learned to choose the right stocks to buy. If you are afraid of not mastering the market well, do not hesitate to do social trading. This technique consists of copying the positions of the best traders in order to see the operations carried out by more seasoned people.
Trading: what is the difference with cinema?
In the movies, the trader is seen as a financial pro who amass money and girls. Many films have highlighted the profession of trader, such as “The Wolf of Wall Street” by Martin Scorsese, with the meteoric rise of Jordan Belfort (played by Leonardo DiCaprio) by breaking the law or even “Wall Street” by Oliver Stone, which tells the true story of Michael Milken (Charlie Sheen), a young wolf attracted by easy money.
The excesses of trading evoked in the cinema
Unfortunately, the cinema has focused a lot on the excesses of financial speculation, like the film “Le Sucre” which takes up a scam carried out on a speculative bubble on the raw materials market. The cinema accentuating the excesses for more sensationalism, the films developing the idea of trading are not necessarily very rewarding for finance professionals. Only “Margin Call” sheds light behind the scenes of this sector. It is true that the director JC Chandor has extensively documented and learned from many professionals in the sector, starting with his father. Emphasis is placed on the protagonists.
The qualities of a trader
The perception highlighted by the films is not necessarily the same in reality. Of course, money can flow freely with a good knowledge of the financial sector. However, you have to manage your stress well and each profile is different.
To be a successful trader, you must first define your goals and master the techniques. Even though the popular approach to trading may be negative, you can only benefit from it with a good knowledge of the sector. You have to know how to be moderate and objective in your approach to trading. By applying the right techniques such as Take-Profit or Stop-Lossyou will know how to reap all the benefits.
To be successful in making profit, you also need to develop a good trading strategy. By carrying out the right operations on the markets, you will be sure to win. You may not have the life of a Jordan Belfort like in the movies, but you will be able to live well for the duration in all legality. Finally, you must have several essential qualities for the job to trade. You must therefore demonstrate:
- in cold blood,
- of perseverance.
If you have these qualities, you will know better analyze the markets and therefore invest better. Even if the emphasis is on drifts in the cinema, trading can have good press in everyday life. This field has become more and more accessible thanks to the development of online trading sites. By choosing the right broker and having good training and knowledge on the technical elements, you can become a good trader. You will get the dividends of your work.