There are many forms of trading strategies, ranging in risk and make up. These strategies may require different forms of analysis, including quantitative to technical analysis. Each type of strategy can be successful depending on how they are used, and there is not one that is better than any other. Rather, the best portfolio is one that is well suited to the individual investors particular needs. Some traders would rather keep a low risk portfolio over the long term, while some are more concerned with making money very quickly. Learning how to make money trading is achievable, although you should be mindful of the risks.
There are many reasons to become involved in trading which may require different forms of trading strategies and products. It is important to match products with the needs of a portfolio. A more diversified portfolio, for instance, across industries and regions, and containing different instruments such as blue-chip equities and debt instruments is often considered less risky. However, low risk portfolios, while safe, do not typically make a lot of money and are not often referenced when discussing how to make money trading. It is important to consider your own circumstances before trading or investing. If in any doubt, you should consult an independent financial adviser before investing.
Key principles of how to make money trading include:
- Know your entry and exit points of a trade
- Hedge your bets to ensure losses are not too significant
- Be disciplined
- Follow your trading strategy
- Have a long enough time horizon for gains to realize
- In the case of losses, accept them and try to move on
- Take care to mitigate your risk when using margin, as both gains and losses can be accentuated
- Know your companies and markets. The more information, the better
When learning how to make money trading, investors may choose to use both short and long trades. Going short involves selling a company that the investor does not currently own with the expectation that price will decrease. Then, the trader can buy the asset at a lower price and return it to the entity borrowed from. Going long is when an investor purchases the asset with the expectation that the price will increase. This typically occurs over a longer period of time. If trades are completed within one day (both bought and sold, or sold and then bought as the case may be) they are considered day trades. Day trading is one particular style of trading, and one of many methods of how to make money trading.
Accendo Markets unique content can help an investor learn how to make money trading. Reports and trading opportunities cover the basics of analysis, including the fundamentals of chart analysis and detailed information on financial products. More than this, Accendo Markets content includes information on industries and regions to help investors make informed trading decisions. Our reports also cover detailed trading strategies specific to commodities, foreign exchange, CFDs and more.
When engaging in any trading style, it is important to remember there are many risks. While the possibility for gains are significant, the chance to lose is also significant. However, with Accendo Markets platforms, which offer detailed information on industries and assets, as well as reports on trading strategies and analysis, learning how to make money trading is made as achievable as possible. Whatever you do, ensure you give sufficient consideration to your risk management strategies, such as utilising stop-losses.
Nothing on this page should be taken as financial or investment advice.