Online trading or stock market trading is one of the most common and old ways of making money in the internet. Online trading includes Forex (currency trading), stocks, bonds, shares, futures and other financial instruments.
The basic principle of making money on stock market is to buy cheaper and sell more expensive.
Accordingly, a trader is a person engaged in trading in the stock market has a certain goal – to increase his capital by investing into financial markets.
Buying stocks or currencies is done through a broker. A broker is a middleman who takes a commission for its services.
Stock Exchange is a place where buyers and sellers meet to close new deals. Today all trading actions and transactions are done virtually in the internet. There is no need to go anywhere or call anyone if you want to make money trading the stock markets.
Volatility is a statistical financial measure of the variability of prices. The prices are always moving. They are constantly going up and down. These movements and changes are called volatility. If the volatility of the market is high, means that the prices are moving a lot. If the volatility is low, means that the market prices are not moving.
Traders are making money on the stock market when the prices are moving. Thus you buy a stock for low price and sell it when it changes for higher price. This is the main principle of making money when trading in the stock market.
Therefore high volatility benefits a trader. Because a trader is making money when the prices are moving, creating more opportunities for buy and sell deals.
How Can You Make More Money Trading Stocks?
There are 2 main solutions to increase your income:
1. Find a broker with low commission
2. Trade when the market has high volatility.
There is a number of brokers over there and each of them has different commissions for trading. The broker’s commission is usually called spread. Spread is charged when a trader performs a buy or sell action. Spread is a difference between buy and sell prices. Each broker has different spread for different financial instrument. Usually you can find a list of financial instruments and their spread on the website of each broker.
When looking for the best broker to trade with, check and compare the brokers’ spreads. Trading with a broker who offers lower spreads may help you save lots of money.
Our recommended brokers is eToro. This broker offers low spreads and great services for trading in different financial markets. eToro is one of the high rated online trading broker out there with over 4 million registered users.
Is it Difficult to Make Money in the Stock Market?
Any business has its own complications. But if you realize why you need it, set up your goals and motivate yourself for success, your approach will be completely different.
The fact is that 9 out of 10 beginner traders are loosing and never come back to stock market trading again. The truth is that it is not easy to make money on stock market, but it is very possible if you know how.
In order to make money trading on the stock market you need to do the following:
• Learn about the markets and how to trade.
• Learn to control your emotions.
• Practice trading and gain necessary skills and experience.
Learn Stock market trading
The theoretical material usually includes basic knowledge about financial markets to help you understand how the markets work.
Also, you will need to study the technical and fundamental analysis. This knowledge will help you develop your own trading approach or strategy for trading financial markets.
Psychological aspects of trading
The fact is that for many beginners trading on the stock market is primarily a game of chance such as casino. Sooner or later, usually sooner, the moment comes when such traders drain all the money and never come back.
Many newcomers panic when the market starts moving against their predictions. When beginner traders see how their hard earned money is disappearing, they panic and start making very stupid and random trading decisions that lead to even higher losses.
It is necessary to reduce the risks if you want to make money on stock market. A good tool for this is a stop loss order. This is an automatic tool that closes your trading position if you have a certain amount of loss. So if your trade is open and you are not around your computer, the stop loss order will guard your trade and will close it automatically once you start loosing. Using a stop loss order will help you limit your losses and save your capital.
As you can see making money on stock market is a tough business and it requires hard work of learning and practicing in order to achieve good results. But still stock market trading offers a great opportunity to increase your capital and make money if you know what you are doing and totally motivated for success.