Trading in financial markets is considered to be one of the most profitable types of activities. This is why the question “Who is a trader?” is on everyone’s lips today. Against the backdrop of the Covid-19 pandemic, this profession attracts even higher interest among people.
Firstly, because you can make a profit in financial markets regardless of what’s happening in the world. Secondly, because you get a chance to make money remotely without being tied to a certain location.
In today’s post, we are going to learn who the trader is, how to master the art of trading from scratch, and how to start making money in financial markets.
Basically, what the trader does is earn a profit in the financial markets by trading financial instruments such as stocks, futures, fiat currencies, cryptocurrency, etc. Forex traders operate in the foreign exchange market.
In the early days, traders would stay on the floor of stock exchanges, yell and make relevant gestures to express what they intended to do - buy or sell. Later on, as trading kept evolving, telephone trading was introduced so the exchange trader could inform about the desired trade by phone.
Since those days, the answer to the question "Who is the trader?" has remained unchanged. The only difference is that all trades are now made online using special software - trading platforms, or terminals that provide the access to financial markets.
By answering the question "Who is the trader?", we have established that it is basically someone who buys and sells financial assets, while profiting from their price difference. In other words, if you buy an asset at a cheaper price, wait until it goes up in value, and sell at a higher price, you can make a profit.
What is traded in the financial markets? There are traders who trade stocks. These are securities issued by public companies. You can trade them in stock exchanges. Among the most popular ones are the New York Stock Exchange (NYSE) where stocks of American companies and large joint stock companies from other countries are traded.
Forex traders are those who make trades involving fiat currencies. They keep a close watch on the changes in exchange rates, find favorable prices to make currency pair trades and thus make a profit.
In addition, there are crypto traders who, as the name suggests, trade cryptocurrency. They specialize in trading commodity futures. That being said, the most common type of traders is those who trade not just one financial instrument, but several ones. This may include stocks, currency, futures, etc.
Trader’s key task is to figure out where the price is going to move next. This will allow making a winning trade.
It is worth mentioning that trading in financial markets offers one major advantage - you can profit not only from increase in prices, but also their drop. This is what a "bear speculation", or opening a short position means. The example below demonstrates the sale of the AUD/USD pair when the price goes down. While the exchange rate was dropping amid the coronavirus panic, traders opened short positions and made a profit.
What makes a trader successful? Basically, a successful trader is someone who knows how to make winning trades. To achieve this, the trader needs to have certain skills. The key one is the ability to predict price movements accurately.
Becoming a successful trader is not quite as difficult as it may seem. However, the newbie can face a lot of hidden pitfalls. So, before trying to explain who successful traders are and how to become one, it must be noted that it is better to overcome obstacles by having an experienced mentor by your side, rather than on your own. This way, you can save time, money, effort and a couple of mental breakdowns on the way to reaching a consistent and stable profit.
Below is a step-by-step guide on how to become a successful trader if you have never traded before and are about to dip your toes into financial markets.
1. Find a trustworthy brokerage company. A private trader can only trade in the financial markets by opening an account with a brokerage company. Gerchik & Co is not just your regular broker. It was founded by traders with traders in mind. Who will know better what the newbie and experienced market players need than an actual practicing trader who knows this field inside out? You can be certain that here you will get your hands on the best conditions to push your business forward, while you and your money remain well protected!
2. Complete proper training. Training offered by Gerchik & Co is another strong suite of the company. Not only are you provided with excellent brokerage services, you can evolve as a professional trader with an experienced mentor guiding you along. You can get started with free training with a chatbot.
3. Open an account with Gerchik & Co. You can do this along with the first two steps simultaneously. Start out with a demo account where you can learn how to open trades, gain an understanding of the inner workings of the market and familiarize yourself with a trading platform and its features.
4. Once you have learnt how to analyze the market and completed the essential basic training, pick the market where you wish to trade. Even though Forex traders typically trade currency pairs, it is not the only asset they work with. At Gerchik & Co, you can also trade CFDs on stocks, commodities, and cryptocurrencies. What matters the most is that you understand how the assets you choose work.
5. If you have completed all the above steps, you already have a trading account, the necessary understanding of trading terminal and basic skills needed for market analysis. Another essential aspect is to master the art of capital management and create your own money management strategy. The use of the Risk Manager software is also a must. It will protect your money against losses and help you gradually increase your trading gains.
6. Whether you succeed in trading further depends on you only. Consistent practice is the key here. The more time you spend analyzing the market, observing it and making trades, the greater the gained experience.
Trade using your own trading strategy, stay in touch with the mentor, never stop learning and improving your skills and knowledge! And it won’t be long till trading will become your stable income source.