What is online trading? The complete guide on how to do online trading
Welcome to tradingonlineguide.com, the main guide to trading online for beginners.
Here you can find all the information about: Online Trading, Forex Trading, Cryptocurrency Trading and the best Forex Brokers.
Read our Guides
Learn everything about Forex Trading, CFDs, pips, leverage, margin, demo account and forex trading strategies.
Learn more about Bitcoin, Ethereum, Litecoin, Ripple and many more cryptocurrencies people are investing on today.
Best Forex Brokers
Read our reviews about the best trading platforms and best forex brokers in the market, their real and demo accounts.
What is Online Trading?
The introduction of technology into our lives has altered a lot of things, including how we trade.
Nowadays we don’t need to physically go to places like Wall Street to buy stocks or shares. Today we can do all of this from the comfort of home.
This is called Online Trading.
It’s a very easy way to invest in the stocks & shares markets directly from your mobile phone or laptop via a website. There is a vast range of financial products that you can trade with, it doesn’t matter which ones you choose.
The idea is that you can either buy or sell a product through an online trading platform provided by a broker.
The main financial instruments you can trade online are Forex & CFDs (Contract for Difference), Cryptocurrencies, Indexes plus Options and Stocks (if you’re interested in stocks, you can find more info about stock trading at stocktrader.com or tradimo.com).
Binary Options also used to be a popular product offered by brokers. However in Europe they are now completely forbidden since ESMA, (the European Securities and Markets Authority) placed an outright ban on them.
Internationally though and outside Europe, there are still a few regulated brokers who offer binary options.
What is online trading in Forex and CFDs (Contract for Difference)
Forex stands for foreign exchange market and it’s open to everyone. Anybody can trade in it: banks, credit institutes, companies and private individuals. Basically, anyone with an internet connection can do it!
The main thing you can trade in Forex is currencies. The most traded asset is the currency pairing of Euro/Dollar (EUR/USD). So you’ll be deciding whether the Euro will get stronger than the Dollar or vice-versa.
CFDs (Contract for Difference) means a contract between a trader and a broker. A trader decides to invest in CFDs because of the chance to trade in a selection of different types of assets. This can also include currencies.
Assets include things like:
Maybe you’ve asked yourself: What is cfd trading? How does cfd trading work? How can I invest in so many assets at one time?
The answer is easy- you do not own anything you trade, but you invest through a contract for difference.
This means that you’re only speculating on a trend. Therefore you can make small but multiple financial investments at the same time.
For a detailed explanation about Forex&CFDs trading and to understand further on how to trade forex just follow this link to our Forex Trading page.
What is Cryptocurrency Trading
In the last few years, the big topic that investors and traders have been talking about is cryptocurrencies, also known as crypto. The number of traders starting to invest in crypto has boomed!
But what is a cryptocurrency?
A cryptocurrency is a digital currency used to trade or buy goods through an encrypted system which keeps the transactions secure.
There are a lot of digital currencies available such as Litecoin, Ethereum and Ripple. However, the most famous and globally recognised one is Bitcoin.
This means that cryptos are actual currencies, but different from the normal ones like Euro, Dollar, and British Pound because of a few features:
- Decentralized system
Because all crypto exchanges happen online, you will need access to a crypto wallet where you can store any digital currencies. A crypto wallet holds all purchased crypto online in a crypto wallet.
For a detailed explanation about Cryptocurrency and how to trade them, just follow this link to our cryptocurrency trading section.
Online trading platforms
What is an online trading platform? It’s a place where you can trade online.
You can complete all trades online using online trading websites. These can be viewed as financial interfaces on the internet.
Each platform is hosted by a broker, and each platform has various settings. For instance, some platforms are suitable for more experienced traders and others for beginners.
But which one to choose?
What is important to take in consideration when deciding your broker:
- Minimum deposit
After having answered the question ‘how to trade online’, hopefully you understand better how to select your broker. Please see the page best trading platforms to find a list of best regulated brokers.