Cryptocurrencies, stocks, and Forex – How to trade?
A crucial choice all novice traders face early in their career comprises selecting the assets to trade. This dilemma comes down to deciding whether to trade Forex, cryptocurrencies, or the stock market. However, all of these markets come with the opportunity to make your money grow if you are doing it correctly.
Even if you don’t know the ropes, the trick is that all of these markets have something in common. And whichever assets you choose for trading, the starting points are similar, as well as some basic rules regarding the trading process.
Let’s take a look at essential things to know and steps to take when you start trading cryptocurrencies, Forex, or maybe stocks.
How to start trading cryptocurrencies, stocks, and Forex?
No matter what market you are a fan of, trading platforms are also designed to offer multiple assets trading. You can choose one asset to get started or diversify your portfolio by trading on several markets.
Trading on several markets is suitable as a hedging method. You can cover your losses on one market with the profits on the other. But be careful, as a rookie, start small, and start with the one type of asset until you get the confidence.
Having a trading plan is a must. In your plan, you usually start from the amount of money you have allocated to invest, the commitment time for trading, and then start searching for the best offers.
The market is saturated, but fortunately, there is a Forex broker list as the primary information source. You will see the basic information regarding trading assets, spreads, minimum deposits, and the brokers’ star review rankings.
Opening a trading account
Opening an account is a no-brainer process. But you need to choose the type of trading account carefully according to your trading plan, considering and comparing all costs.
After you have chosen the broker, you fill the application with your details, fund your account, and you are ready to start trading.
For the new traders, trading on a virtual account is the option without putting any money on the account. It’s also advisable for seasoned traders when they first time engage with a certain broker. It gives you wiggle room to explore their trading platform, check customer support efficiency, try the trading strategies, and many more.
Benefits of the volatility of the market with day trading
Day trading is relatively speculative trading that happens within the same day’s hours. Day trading strategies mean playing on small and frequent price movements.
One of the most popular is scalping, used mainly by Forex traders. It comprises the make profit on price fluctuations which can occur within a minute.
The other popular day trading strategy is momentum, where you are monitoring the assets that are particularly sensitive to current political or economic events. This event affects the asset’s price, which can vary from 20 to 30 percent during the day. By following the news, you determine when to open and close trading positions.
However, bear in mind that day trading strategies are not for long-term investment. It’s quite the opposite of it. And, it’s primarily suitable for Forex traders and cryptocurrency traders.
When it comes to stocks, medium to long-term investment should be your choice. It’s advisable at least at the beginning, until you grasp the markets and trading process thoroughly.
Shorting the markets is a viable strategy for the crypto market, but it also requires a decent trading experience and caution. We have recently seen many Forex exchanges offering bitcoin as a currency to trade against traditional currencies. Although the volatility is where your profit on the Forex market comes from, keep in mind that the cryptocurrency prices, especially the most popular ones, are difficult to follow no matter if you are a newbie or an expert.
No Comment