How to Trade CFDs Online

When we talk about online trading, we immediately think of stocks. This is why it is essential to remember what an action is and how it works. It is also important to remember that this guide is intended for beginners, so the instructions will be simple.

When we say we buy shares, we are actually buying “parts” of the company, i.e. “securities”.

The stock market operates according to the well-known principle of supply and demand. There are buyers on one side and sellers on the other. As a result, the price of shares changes according to these two parameters. If there are more buyers, the price will tend to rise; on the contrary, if there are more sellers, the price will fall.

The capital

Remember that the funds you need soon must be invested in the stock market. It is true that it is possible to start trading shares with a small amount (1000 euros), but this is not the right way to start off on the right foot. Indeed, if you choose to trade on the stock market, it is better to diversify your investment portfolio. If you choose to start with a smaller amount, you will not be able to diversify your investment portfolio, and due to the lack of funds, when opportunities arise while you are already in a position, you may be in trouble.

A good starting capital should be around €5,000. With this amount, you will be able to invest in several stocks, and if you have a potential position, you will not be frozen.

In any case, as a beginner, it is not easy to enter the market. To ensure the sustainability of your funds, it is strongly recommended that you don’t go into real life, but practice what used to be called “paper trading”, now called virtual trading.

With the advancement of technology, most securities trading platforms offer virtual accounts. The principle of these virtual accounts is to allow beginners to enter into real market conditions, but to place virtual orders. In this way, beginners can learn about the device, test the market and understand how it works before they live. Obviously, there is a big difference between fiction and reality, which is psychological. People often find out that a person makes imaginary money but has experienced many difficulties in real life. Business requires real self-control, which is not always easy to master, but it can be learned.

Open a trading account

You cannot place an order without a securities account. Here again, you have to be careful when choosing a broker. A broker is an intermediary who allows you to execute orders in the market. Pay attention to the flood of advertisements on the Internet and do not choose your broker based on the following conditions:

  • Tools provided by the trading platform
  • Effective fee for each transaction
  • The minimum amount required to open an account
  • Hidden costs, please read the contract we offer you
  • Accelerate order execution
  • Quality of customer service

In practice

As mentioned above, share trading requires certain skills. There are two points to know when one wants to trade in this market.

You will have to master some basic analysis: being able to evaluate the operating conditions of the company, calculate profits, analyze balance sheets, etc. This is something you need to know.

The second point: technical or graphical analysis. By visualizing and studying graphs, you can predict market prices. Of course, the stock market is not an exact science, so the development of the market can never be predicted with certainty.