Stock market speculation is an interesting activity to make money. Especially since the advent of binary options and online trading sites, it has become easier to generate profits from this practice. While online trading has become accessible to everyone, there are a few things you should know before you start. How does stock market speculation work? What are the risks? How to choose a broker? Or what are the steps to take in order to make profits? Discover the answers to these questions through our guide :
Start binary options
The binary option officially came on the market in 2008. Its appearance marks a revolution in the world of trading. From now on, all individuals can start trading more easily. It is, in fact, the easiest way to make money on the stock market. The basic principle is to guess the future direction of an asset’s price before it expires.
Trading conditions for binary option trading remain, of course, dependent on the broker in question. It is this broker who provides the trading platform and who proposes the types of shares that can be traded or not during transactions. Minimum deposits, rates of return, returns on losses or maturity ranges depend on the conditions applied by the broker.
In any case, the first step to take before trading online is to acquire the necessary basics. In order to better manage the risk of loss and obtain maximum profit, it is, in fact, essential to know not only the basic functioning of the binary exchange, but also the strategies to be applied. Thus, one should not hesitate to register for online trading courses, which are now available free of charge on the web. Most brokers also offer integrated training courses, allowing novices to learn the practice directly at home. After learning, these novice traders can then practice via a demo account. This account is generally free and allows them to practice on the platform with fictitious money.
Regulation and scams
Since it is an online activity, binary options trading is not immune to scams. Unfortunately, unscrupulous brokers do exist and, moreover, their numbers have been increasing steadily since individuals started trading. Caution is thus called for and, in order not to be fooled, a few points should be considered before choosing a broker.
Most of the time, ill-intentioned brokers offer very interesting offers, even “too” attractive to be true. The traders’ objective being to make money, these traders do not hesitate, among other things, to offer very attractive welcome bonuses in order to seduce their customers. In return for these bonuses, they obviously require a first deposit and, once the amount is paid into the account, they simply disappear and leave the trader at a loss.
But how do you avoid these scammers?
The main rule for safe online trading is to always choose a regulated broker. The trading market is, in fact, controlled by many organizations, which only give their approval to trusted brokers. Among these institutions are CySEC, which is the supervisory authority in Cyprus, the ACPR Banque de United Kingdom, the FCA in the United Kingdom and the AMF (Autorité des Marchés Financiers) which is the reference body in United Kingdom and Europe.
The brokers regulated by these institutions are subject to strict regulations and are thus obliged to secure transactions. In particular, they are required to apply strict security measures on their platforms and, in order to ensure solvency at all times, they must also place traders’ funds in independent accounts. There is thus no risk for traders, especially since in the event of a dispute, it is possible to contact a regulatory institution to seek redress.
Nevertheless, some brokers sometimes use fake licenses to fool traders. Therefore, the best way to be reassured about their regulation is to directly consult the lists drawn up by the agencies. In addition to the white lists, the AMF also draws up a black list. Updated every quarter, this blacklist includes the names of all brokers to be avoided.
Thanks to the evolution of technology, online trading no longer requires you to stay behind a computer. Trading tools are now accessible on mobile devices. In order to optimize the traders’ comfort, operators have therefore designed applications adapted to Android and iOS systems. Transactions can now be carried out simply via smartphones or tablets.
Mobile trading offers various advantages to traders, including the ability to trade anywhere, anytime. All you need to do is to connect via the Internet to access all the features, which offers great freedom to individuals. It is also a very convenient way to stay responsive. Since responsiveness is a key element in trading, so as not to miss opportunities, brokers have designed various offers that make it easier for traders. Among other things, traders can follow market movements on their phones and receive SMS alerts when opportunities arise.
The use of mobile phones thus offers a great deal of flexibility to traders, who no longer have to stay at home or in the office to make money online. This being said, there are some constraints to this kind of practice and it is necessary to take a few precautions before embarking on it. In particular, some places do not allow for a good Internet connection, which can lead to delays in carrying out transactions. Because of the small screen size, mobile devices may also impair certain functionalities, such as the use of technical indicators.
Thus, it is up to everyone to take the necessary steps if they wish to trade on mobile phones. The choice of a suitable platform is particularly important in order to be able to access all the functionalities.
Trading on the stock exchange
Online trading has become a real success. And the tools offered by brokers have a lot to do with it. Thanks to the online trading platforms and the various features available, even beginners can start this lucrative practice. The online stock exchange market is, moreover, very vast and, apart from binary options, trading on Forex and CFDs is also a great alternative for investors. The principle is to register with a good broker, select an asset to invest in and bet on.
Of course, stock market speculation is not just about these steps, but requires many other points to be taken into account. Which asset to choose? When to buy a stock? How to minimize risk? What strategy should I use? How much to bet? All these questions must be answered before opening any position.
The trader must therefore go through market research and technical analysis in order to grasp its subtleties. He must also know the different trading strategies such as scalping, hedging or rollover, know how to choose a floating or fixed spread or exploit leverage effects. These are all elements to consider before placing orders.
Online stock market speculation is not difficult and most brokers make it easy for traders. The procedures to follow, transaction costs and some trading techniques are already explained on the portals. And as a bonus, online trading courses remain accessible to everyone. Don’t forget that you can also trade on stock market indices such as the CAC40 with binary options.
Even if online trading is a real way to make money, you should not forget that it is a risky activity. It is already necessary to know how to choose a reliable broker and, on top of that, you have to know how to apply the right strategies in order to be able to make a profit. In any case, stock market speculation is perfectly accessible to everyone, even novices. It is only necessary to acquire a certain background and to respect the rules, instead of launching blindly.