Want to trade the markets? Start the smart way

Are you ready to enter the exciting world of securities trading?

If so, it’s important to start out the smart way. Remember, your money will be on the line.

Even though there’s a good chance of earning a profit, there’s no sense in letting common errors get in your way as you learn and earn.

What’s the most intelligent approach?

Step one is about doing the essential research and gathering very basic facts about trading and investing.

Find out how the various markets work, and don’t restrict yourself to traditional stocks and bonds. Read up on commodities, forex, CFDs (contracts for difference), futures, options, and ETFs (exchange traded funds).

After acquiring the core knowledge needed to begin, locate a broker that suits your needs and has a solid reputation.

Then you can move on to choosing a niche in which to operate, like corporate stocks, CFDs, or whatever interests you most.

For a large number of beginning investors, forex and CFDs represent the best and simplest way to get a feel for how markets operate.

Don’t neglect to find out about the various software platforms and products available to today’s trading and investing enthusiasts.

Fortunately, you don’t need to be an IT wizard to understand how the best-loved programs and systems operate. All the best software products are designed to be user-friendly.

Finally, dive in and do some research on some of the most useful technical and fundamental analysis techniques.

After deciding which ones are your favorites, you can incorporate most of them into the software trading platform of your choice.

In fact, knowing how to choose a trading platform is one of the most important skills of all, so be sure to spend time exploring your options.

Here’s more about each of the steps listed above.

Do the basic research

Learn about the major international securities exchanges and spend time acquiring elementary chart reading skills.

There are hundreds of excellent websites for gathering the essential facts.

If you have a broker in mind, consider using their educational resources like video tutorials, free e-books, and articles on relevant topics.

Find a suitable, reputable broker

Finding a reliable broker is perhaps the most important, if not the first step in the process.

That’s because you need to work with a firm that caters to beginners. Some don’t. It’s also imperative to have access to a demo account so you can use a simulator to learn basic order placement skills.

Spend time on this step and vet brokers carefully.

Read online reviews from current and former customers.

Look at websites to see how user-friendly they are. Consider a trial account so you can really dig deep and experience the feel of the platform you select.

Choose a niche

Experiment with different securities before deciding which one or two are the best fit for your trading philosophy and personal preferences. For many beginners, forex and CFDs (contracts for difference) are the ideal choices because order placement is relatively simple, the price action never gets dull, and there’s a short learning curve for both.

Learn about software

You don’t need to become an IT guru or programming genius to take advantage of trading software.

In fact, most brokerage firms will help you learn whichever versions they offer via tutorials, webinars, and online practice sessions.

Consider matching software to the kind of securities you trade.

Some products are designed to work better with stocks and bonds, others with cryptocurrency and gold, and still others with CFDs and forex.

There’s no rush. Take your time to learn as much as possible before putting your capital on the line in live trades.

Explore technical analysis

Technical analysis is one of the most common ways that new and experienced traders make decisions about which securities or assets to acquire, sell, or hold.

The topic is huge and includes dozens of sub-categories.

A good example of how to use a technical indicator is to compare a given security’s 50-day moving average, of price, with the 200-day moving average.

If the 50-day line has just risen above the 200-day point, there’s a good chance that the stock is entering an uptrend. Investors use all sorts of technical analysis methods to determine whether a specific security is about to rise or fall in price.

Read about fundamental techniques

Fundamental factors are mostly quality-based facts and characteristics about a particular company.

For example, if ABC Inc. has recently elected a new board of directors and just released an innovative product into the marketplace, those two non-numerical pieces of information could be a big help in evaluating the company’s shares for potential purchase.

Disclaimer: This article does not serve as financial advice.