Learn How To Trade Online – A Beginner’s Guide
Welcome to our beginners guide in learning how to trade the world’s financial markets in 2023. Our guide will provide you with an easy-to-understand explanation about all things online trading; what it is, what can be traded, how to trade online, how to find the best online trading account, plus much more.
Let’s Get Started…. What Is Online Trading?
Online trading is when you speculate on the price movement of a financial asset through an online trading platform. This online trading platform technology is provided by various online brokers from all around the world. You will need to choose a broker to trade with, but more on that later.
When you place a trade online, you are either buying or selling a global financial product in the hope it goes up (or down if you’re selling) so you can make a profit. It’s important to note that you are speculating on the price movement and you do not actually own the physical asset.
Who Can Trade Online?
In days gone by, online trading was reserved for large banks and financial institutions. The introduction of the internet changed that and now anyone over the age of 18 and with an internet connection can trade online.
As most brokers offer online trading platforms, all accessible via the internet, all you need is a smart phone, PC, laptop or iPad to access the world’s financial markets
What Can You Trade Online?
Most brokers offer a wide-range of products to trade on their trading platform – a standard broker will offer the main markets, say at least 1,000 of them. Other brokers will offer everything (literally)… We know of one of two brokers that offer over 30,000 financial instruments!
What are the main financial assets a broker will offer on their platform?
- Forex: like AUD/ USD, USD/JPY, GBP/ USD, EUR/USD and many more
- Indices: like the ASX 200, Wall St 30 (the Dow), S&P 500, the German 30 (the DAX), the FTSE100, plus more
- Commodities: like natural gas, gold, silver, oil, coffee etc.
- Shares: most brokers will offer thousands of global shares and the lists can sometimes be endless.. The main stocks will be from the US, UK, Europe, Australia, Asia and some other regions.
- Cryptocurrencies: trade Bitcoin, Ripple, Ethereum and other cryptos online with your broker
What Do You Need To Start Trading Online?
All you need to start trading is an internet connection and proof that you’re over the age of 18. Then you will need to find a broker that meets your trading requirements. Once you have decided on your broker of choice, you will need to sign up with them and download their trading platform. Some of our recommended brokers are listed below.
Simple steps to start online trading;
- Choose a broker
- Sign up and open a trading account
- Download the broker’s trading platform
- Fund the account and start trading!
Compare some of the leading online brokers. All 3 brokers are fully regulated:
Leading
CFD Brokers
Who are they?
Standard Leverage
Regulation
Min. Deposit
Segregated Bank Accounts?
ASX Stock Commission
Australia 200 spread
Wall St 30 spread
AUD/USD spread
Spread Type
Trading Platform
Next Steps
Low-Cost
CFD Provider
200:1
SCB
$0
0.07% with $5 min.
0.9pts - FIXED
1pt - FIXED
0.6 pips - FIXED
Fixed
CloudTrade, MT4
Fast-Growing
CFD Broker
30:1 (AU)
ASIC, FCA
$100
No ASX stocks
1pt
From 1.6pts
From 0.5 pips
Fixed & Variable
cTrader or MT4/ MT5
World-Leading
CFD Broker
30:1 (AU)
ASIC, FCA, MAS
$100
0.08% with $5 min.
1pt
1.6pts
From 0.5 pips
Variable
How Do You Choose a Broker To Trade With?
When conducting your research to find your ideal broker, there are a few important factors to consider. If you do not have time to research the differing brokers, you can use the comparison table above to check out a few leading brokers. However, if you have the time, please continue to read to learn more about the key broker features to consider.
Regulation
Please only ever trade with a broker that is regulated by a strict and well-known authority. Some of the most respected global regulators are the Australian Securities and Investments Commission (ASIC), the Financial Conduct Authority (FCA) in the UK and the Monetary Authority of Singapore (MAS), to name a few.
Trading with a broker that holds licenses with well-respected regulators ensures that the broker is operating in accordance with strict rules and regulations that are in place to protect you – the investor!
Spreads & Fees
Brokers typically make their money from the spread and/ or commission charges they apply to each trade you make. These spreads and fees should be as low as possible – always remember, the lower the spread/s, the cheaper it is to trade. Some brokers charge more than others so you need to find a competitive broker that is clear, honest and upfront about their trading costs so there are no hidden surprises.
Check out some of the more common trading costs here.
Trading Platforms & Technology
Your broker of choice needs to provide you with a top-quality trading experience. Therefore, you must enjoy using their trading platform, rather than seeing it as a chore otherwise you will simply fall out of favour with it. We’d recommend testing a range of platforms to see what you like about each; only then can you make an informed decision.
Most brokers will offer a selection of trading platforms, giving you the ability to find one that you like. These typically include the most well-known platforms like MT4, MT5 and cTrader, as well as their own in-house built platform.
Trading Instruments
There are tens of thousands of different markets and asset classes to trade so you must ensure that your broker of choice (a) has a good selection of markets to trade and (b) they have the markets that you want to trade!
Customer Support
Always trade with a broker that offers an excellent customer support experience as you’ll never know when you’ll need it. Ensure your broker offers support 24/5 to cater for all the different timezone; again, you’ll never know when you need to call. Furthermore, you want friendly, knowledgeable and helpful support – that doesn’t sound hard but it can be difficult to find.
How Much Money Do You Need To Start Trading?
As online trading is considered a margined or a leveraged trading product, you do not need as much money as you think to start trading. Leverage allows you to enter a larger position size than you’d typically be able to. For instance, if a broker offers leverage of 1:200, this means for every $1 you deposit onto your account, you have access to an additional $200. So if you make an initial deposit of $1000, you will be able to make trades up to a value of $200,000.
Most brokers will have a minimum deposit size to open an account, typically starting around $100 (see above table).
Can You Make Money Online Trading?
You can but the simple fact remains that around 70% – 80% of clients lose money over time. There are many reasons for this but all viewers must be aware of this fact. Of course, that means 20% – 30% actually win money so there is a chance that you can be successful!
See some common trading mistakes by clicking here.
Ready To Start Trading?
We hope you’ve enjoyed reading this guide to online trading and have learnt about some of the basics. If you’re ready to take the leap into online trading then please choose one of the online brokers listed in the table above. All the very best in your trading journey!
