Let’s find out how to trade online, the first thing that will be needed will be an intermediary or broker, because what a Trader usually does is to invest in stocks, stocks, indices, currencies, commodities or other, so you will need an intermediary that will allow you to buy and sell these financial instruments on the market.
The first thing, therefore, that you will need to equip yourself to do Online Trading, will be to open a Trading Account, through a secure and regulated broker.
How to Open a Free Demo Account
They are the so-called Trial Accounts or Virtual Accounts, most of the Brokers allow you to open a Demo Account, through which you can have fun trying to buy or sell, test the platform with all the features as if it were a Real Account but with the difference of not risking losing your money, then you can decide whether to open a real account or not.
Demo Accounts are free and do not involve any kind of commitment, because once you have done the test you are not obliged to open a real account.
They are tools that we absolutely recommend especially for those who approach the world of online trading for the first time, allow you to practice and gain experience before investing real money.
Forex: How to trade online with currencies
It stands for Foreign Exchange Market (FX), which is the currency market. It is a market that has had a really incredible expansion in recent years.
The interesting aspect of currencies is that they are tradable 24 hours a day, usually at night the volumes drop a little bit, because the best sessions to trade, so where there is the possibility to find more traders, are definitely the European session, such as London, which is one of the main places where currencies are traded, so since it is operational as a result there will be more exchanges, and then there is also the American session;
In order to trade Forex Trading you have to buy a currency with another currency at the current exchange rate.
This means that the open position will allow you to make gains if you increase the strength of the first currency, i.e. the purchased currency, compared to the second. So now you can sell the first currency for a larger amount.
To better understand this, a very simple example can be given. So if an investor had decided to buy GBP 20,000 (first currency) in mid-January 2017, it would have cost him about USD 22,100 (second currency) at the GBP/USD exchange rate.
In mid-September the pound rose in value against the dollar, so he could now close his position by selling his £20,000 for around $23,500.
Summing up the investor started with $ 22,100 and now he could have had $ 23,500, and the profit would have been worth $ 1400.
How to Trade Online with CFDs
From the English Contract For Difference, which stands for Contract for Difference, they are practically a financial instrument, whose price derives from the value of other types of investment instruments. CFD trading is a transaction in which two parties agree to exchange money based on the change in value of the underlying asset between the point at which the transaction is opened and the point at which it is closed. One party is referred to as the buyer and the other as the seller.
The buyer party realises a gain if the value of the asset increases, and a loss if the value decreases. Conversely, the selling party realises a loss if the price of the asset increases and a gain if the price decreases.
CFDs are derivative instruments, which allow investors to take advantage of the rise, ‘long position’, or fall, ‘short position’ in the price of underlying financial assets and are often used to speculate in this type of market.
Unlike Futures contracts, which have a very bad feature, i.e., it takes a lot of money to trade Futures, CFDs which were an invention of the British Broker, exactly replicates the performance of any instrument, including for example indices, but allows you to trade all these instruments using less money than it would take, for example, to trade a real Futures on the Italian index.
These are the stock indices, such as, for example, FTSE Mid, which is an Italian stock index. The index is the average performance of all individual stocks listed on a stock exchange.