Turning quick profits with minimum investment sounds like a dream for most Australians. Contrary to popular belief, trading can be a potential income stream provided one is really careful with the investments with calculated risks. With the rise in popular platforms like metatrader in Australia, individuals can automate trades at their leisure without any restrictions and with low commissions. However, as enticing as the idea of buying and selling stocks or financial instruments sound to the average person, trading is not a walk in the park. Most of the time, it’s careful analysis, accurate predictions, willingness to risk it all and in most cases, a sheer case of luck. But, if not careful enough, that luck can soon turn into a cascade of problems.
With the advent of digital finance and more information available to the general public, electronic trading has seen a rapid rise since the year of 2001. Now, with the rise in the cryptocurrency infrastructure, scores of individuals, more than 400000 active ones since 2020, have joined the arena as companies take to adoption and implementation. But before starting on trading stocks or cryptocurrencies, there are certain things the newbie Australian traders need to look into first:
- Always Start Small: Set realistic expectations and don’t just chase after the accomplishments of successful traders. Trading takes time to learn and individuals should set aside an hour or two every day to learn the ropes. By setting small goals, people new to trading can afford to make mistakes without losing too much money or time. Be thorough with the basics and go up from there. Once the foundation is strong enough, the rest of the learning curve will be easy to handle.
- Don’t Put All The Money Into Trading: As tempting as quick returns look, don’t ever put all the money available into trading. It doesn’t matter if the speculations are right or if the forecasts on the stock are positive. One bad move and the entire thing can plummet, taking the money with them. As a rule of thumb when it comes to trading, only invest money that can be afforded. And that means taking care of other obligations first before investing in stocks or trades. Set aside a budget or a limit and try not to go behind that and don’t take money from the rent or mortgage for trading. To keep things safe, set aside an emergency fund too.
- Finding The Right Market: There are plenty of avenues that traders can look into to start with. The market for cryptocurrencies or foreign exchange can be a good start. The futures market is also a good option. For those looking to day trade, a capital or about 25 grand or more might be required.
- Getting Everything Set: Buy a smartphone, or even better a laptop, with access to high-speed internet. Frequent blogs or websites on the stock markets and trading and read up on them. Be well thorough with Australian trading regulations too. There are plenty of learning materials available online so find a niche or an area and focus on that. Electronic trading platforms like the metatrader in Australia can help traders automate their trades and allow them to divert their effort into other productive activities.
- Take Calculated Risks: Forecasts can be harder to predict but the right information and proper market research can tip the scales to favourable outcomes. Don’t just take financial advice from anyone and don’t go for the market hype. Don’t be aggravated by market fluctuations and always be willing to learn from previous mistakes. And above all, have fun!