Thanks to the rising number of users having personal computers and access to the internet, many Australians have discovered the joys of online trading. Popularly known as the easy way to make money, online trading had become a whole new sensation during the onset of the global pandemic as everyone was forced to stay indoors. Reliable trading platforms like the MetaTrader 4 saw an uptick in users and newbie traders looking to cash in on the market fluctuations. Reports indicate that traders who were new to the experience hit 400,000 during the pandemic, the numbers undoubtedly to be bolstered in the years to come.
Contrary to popular belief, stock trading online is not as easy as it seems, and a lot of Australians are left misinformed by social media icons and advertisements. Online trading is not a get rich quick scheme, and no, one will never become a millionaire overnight by trading in stocks. Like just any other profession in life, trading stocks using online platforms like MetaTrader 4 takes a lot of patience, discipline and commitment to learning.
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For those looking to dip their toes in online stock trading, here are some factors to consider first:
- Learn The Basics First: Brushing up on how Australia’s market economy works and how the stocks fluctuate with it might be a good start. There are plenty of resources online on YouTube, blogs and social media pages where people can access learning materials for free. Understand the basic vocabulary for stocks and financial terms and read up on how to analyse a chart accurately. All of these are instrumental in making a good trade, and without them, it will be like directing a ship without rudders. Do understand that a lot of this might come off as boring, but it’s important to stick with it and learn as much as possible. The more knowledge an individual has regarding basic stocks in the market, the better their trading decisions will be.
- Keep On Learning: After reaching a certain threshold of learning, it might be okay to jump into trading and see how everything works out. But don’t ever stop learning and always spend an hour or two every day learning the market, any foreseeable changes, trading patterns and learning other resources. Once a trader becomes adept at reading the charts, they don’t have to spend as much time every day in the future and can work on other things.
- Don’t Be Reckless When Picking Stocks: When choosing stocks to trade online, always do background research on the company and analyse the potential they might have. If the company is doing fairly well, then that will reflect on the stock performance in the market; however, if something feels off, back out of the trade immediately and go for the next one.
- Don’t Go For The Hype: A lot of stocks, especially cryptocurrencies, are built off of market hype. Either stay away from these or only invest a little amount of money that doesn’t put a dent in the overall financial budget. Market hype will fade in the long run, but stocks that perform well are always a good long term investment. Moreover, stocks that are based on hype are usually met with plateauing results, stocks crashing or being rug pulled. Keep emotions out of the way when trading.
- Have A Budget: Don’t put every available resource into the stock trades and always have a fixed budget set aside for these purposes. It’ll also be beneficial to have an emergency fund set up for at least six months in case the markets look bleak.
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