Thanks to technological advancement, online trading has become one of the biggest trends. The instant and hassle-free process of online trading has drawn the attention of numerous investors who are looking to build their portfolio. The fact that you can trade from the comfort of your home, or anywhere else, and start with a minimal investment is certainly a big benefit. While there are no barriers to entry in this space, it doesn’t mean that you dive in right away. There are some things that every investor should know before trading and Shay Benhamou has discussed some of them here:
- A trading plan and strategy
The first thing that every investor should bear in mind is that you cannot start online trading without a well-defined plan. Shay Benhamou states that trading without a plan is a recipe for disaster. You have to have a set of disciplines for entering or exiting the market because it will inculcate confidence. It is a good idea to scrutinize the fundamental and technical analyses of the company/companies you wish to invest in. This can provide you information that can help you in making smart decisions about your investment.
- Polish your knowledge
Before you dive into the world of online trading, Shay Benhamou suggests that you dedicate some time to learn the ins and outs of this space. Your success depends on how much you understand the market and there are extensive resources at your disposal that can help you in polishing your knowledge. This will only benefit you in the long run, so it is a good idea for you to invest your time in it. You can take advantage of e-books, video tutorials and guides and various other courses. Likewise, experts also conduct webinars and seminars that you can attend for gaining knowledge.
- Select the right broker
One of the most important decisions that everyone will have to make for starting their online trading journey is selecting a broker. You will find that hundreds of these brokers are offering their services globally, which means you will have plenty of options to explore. Nonetheless, Shay Benhamou says that this doesn’t mean that you can sign up with just any broker. The key is to find a suitable broker that can fulfill all your needs.
Not every company will be able to do so because their target audience may be different. You should consider services, such as educational resources, customer support, trade and account minimums before you make your choice. Shay Benhamou also suggests that you opt for a broker that offers the latest features, easy accessibility and should have a good trading platform that’s accessible across multiple devices, such as smartphones, desktop PCs, laptops and more.
- Do your research
After you have selected a broker for your trading needs, you would obviously want to start trading right away. But, what will you trade? No, Shay Benhamou says that you shouldn’t just choose a stock or a currency pair because of its popularity, or it is trending. You have to consider your risk appetite, capital as well as your financial goals before deciding where you should invest and what you should trade. Otherwise, you could end up making some bad decisions that you will regret later on.
- Have patience and control emotions
It is also imperative for an investor to find the right balance between fear and greed before they start online trading. As per Shay Benhamou, you may fail and lose money at some point because not all strategies are effective. But, you shouldn’t become doubtful or impatient. You have to have patience because success doesn’t come overnight. Always set your emotions aside when you are trading because the market volatility may push you into making irrational decisions. Your emotions should stay in control and your decisions should always be made based on research and facts in order for them to be the right ones.