If you are looking to get your start in the financial industry, you may be considering making your first investment. This is probably an incredibly stressful decision for you, especially with the obscene amount of conflicting information available online about trading and investing. If that is the case, take a deep breath. You have probably wondered if it was best to trade online, or head straight to a brokerage firm in person. For beginners, you may find it easier and less daunting to trade online. That is why this post will provide you with a easy-to-understand guide on how to trade online. That way, you can start investing as soon as you feel comfortable.
How Much Money Should I Trade Online?
There first thing you will need to determine before you begin to trade online is how much money you will be comfortable investing. You will find that the amount of money you are willing to invest will play a role in narrowing down your possibilities for online brokers. If you are only just beginning to navigate your way through the world of investing, it is best to start small, as with anything else in life. You do not want to have the weight of your life savings hovering over your head, that will only lead you to make investments based on your emotions, which is never a good practice. Decide on an amount of money that you will feel comfortable using to trade online. This is the best first step to becoming a skilled investor.
Find An Online Broker
The next thing you will want to do after you settle on an amount to invest, is to find an online broker. There are many websites available, TD Ameritrade, ETrade and Fidelity, for example. But you want to make sure you pick the broker that fits your needs best. If you have decided upon a smaller amount to invest, that will considerably narrow down your choices. Some online brokerage firms require an account balance of at least $10,000. Do some research on your own to determine which site you like best. Take note of specifics like account minimums, trade commissions and any associated fees. Then, you can use these facts and figures to determine which online broker is the best place for you to start to trade online. As long as you remember to research, you are sure to pick the right online broker for you.
Decide On Your Comfort Level
Once you have settled on a place to trade online, you will need to determine the amount of risk you are comfortable with. If you are a nervous nelly and do not have much money to play around with, you are probably going to lean towards a more conservative investment style. On the other hand, if you feel you have nothing to lose as a young adult just beginning their foray into investment, you may choose to tolerate a whole lot more risk. This is highly dependent upon the individual and what they hope to gain from their investments. Someone who is investing for retirement will have a riskier portfolio than someone who is looking to cash out in ten years. Determine what you hope to gain from your investments, and what you cannot stand to lose. This will help you to form an idea of your own risk tolerance. Then, you can begin to trade online.
As with all new beginnings, you are probably more than a bit nervous about starting to trade online. However, if you follow the steps and advice outline in this post, you will be well prepared to begin your investment journey. Just remember to find out what you are comfortable with – how much you can afford to invest, how much risk you are willing to tolerate, which online brokerage firm fits you best. Once you have done this, you will be able to start your foray into finance on the right foot. If you want to trade online, consult this guide and then get started. There is no time like the present. If you have recently began to trade online, how has it gone for you? What do you wish you had known before you started? Share your experience and advice with us in the comments below.
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