What is online trading – a complete overview of the concepts and stages of online Forex trading + 5 tips on how to succeed in Forex trading9 min read
How to choose a computer for online trading in the Forex market? What are the features of mobile trading? Which program is best for forex trading?
What is online trading?
About twenty years ago to define the concept «trading» the following words were necessarily used: «large building», «crowd of people», «jumping quotes», «cries: I buy! and Sell!». Today everything is still? Not.
How does it work modern trader? is he pushes buttons. On the table in his apartment or office is a computer (or computers), the screen is busy with graphs. The speculator trades one or two tools, watching the rest.
Alert sounds periodically: comes mail and financial news. If a trader has chosen a scalping strategy, he byconstantly clicks on the buttons – catches the smallest price fluctuations.
At medium term or long-term trade does not need to constantly look at charts: stock player daily devotes no more than an hour to work, monitors long-term trends and in time flows into them.
Modern bidding is conducted over the Internet — no need to go to the stock exchange. At Forex trading, by the way, there are no exchanges – the foreign exchange market is located exclusively in the information space.
All necessary information for transactions is provided either in the trading terminal, on either brokerage firm website.
Online trading has a wealth of information: the trader is holding the latest data, on the basis of which he makes decisions on transactions.
What are the types of programs for online trading
Some traders use only trading terminal and own head. The terminal contains a huge number of tools for market analysis, gives out news data. Other programs are optional.
However, some strategies require additional high-quality software. They are divided into three groups, listed below.
View 1. Automated Trading Software
Professional stock player Alexander Elder in his best seller «How to play and win on the exchange» divides programs for automatic trading into two groups: «black boxes» and «gray boxes».
«Black boxes» analyze the market and open deals on their own either indicate to the trader, what tools are worth selling or buying. Answer to the question «why?» they do not give.
Amateurs use black boxes – people, nonsense in the market. For them, the principles of technical or fundamental analysis – dark forest.
But I want to make money in the market – instead of paying tuition, the money of inexperienced novice traders is spent on «time tested» and «super efficient» automatic earning programs.
My friend trader told me: «I completely automated my trading. The robot does the same, and me too». That is, the actions of the robot are clear to the trader, he can stop it or modify it at any time.
Its authoring design saves time, makes trading more efficient and not related to «black boxes». This approach can really be called reasonable.
«Gray boxes» also open deals on their own, but give an explanation. If a trader analyzes these explanations– OK, he will quickly get used to the market. If you don’t understand anything in them – no difference with «black box».
On a note
Professional trader Alexey Kuznetsov answered the question about robots like that: «There are very good trading robots. But you need to be able to turn them off on time».
And to turn off, need to deeply understand the market. So without training and working your head in trading, nowhere. Like everywhere else.
View 2. Professional Trading Software
Professional trading software includes sophisticated indicators, often developed by the trader himself.
To design professional software, have to learn programming language MQL. I haven’t reached him yet, but familiar traders have successfully mastered, don’t think, that’s too complicated.
View 3. Programs for Beginners
This includes all kinds of advisers (which are don’t open deals, but give recommendations), or simple indicators in the MetaTrader4 terminal.
These include, eg, ZigZag – indicator, allowing you to track trends and identify their extremes.
How to trade forex online — 7 milestones
We describe the stages, which you will go to successful stock market game.
Don’t think, that they seem difficult and impossible for you.
Stage 1. Choosing a computer for trading
Traders successfully open deals from any computers. MetaTrader4 Terminal optimized for tablets and mobile phones, so there will be no problems with access to the market.
However, for the convenience of analysis, it is desirable to have widescreen personal computer, to watch multiple charts at the same time.
Performing graphical analysis on tablets is terribly inconvenient, laptops without connected «mice» also not ideal. Therefore, when choosing a computer immediately buy a mouse and a good keyboard for it. The latter is especially true for scalpers, every now and then clicking on the keys.
The most important components: uninterrupted internet access at high speed and operation of the operating system without glitches and freezes.
Stage 2. Choosing a broker
When a computer is selected, you need to find a good intermediary for bidding – broker.
In the next block we will get acquainted with the three most popular companies, from which you can easily choose your ideal partner.
Stage 3. Online Trading Training
At the selected broker you will undergo training in trading. There are companies, where are the lessons fully or partially free, there is exclusively paid tuition – we’ll talk about it below.
Serious training consists of several consecutive steps.
Stage 4. Special software installation
First program, which you install, — trading terminal. Foreign exchange brokers offer to install MetaTrader, with companies, working with the securities market, other software.
Some companies create their own terminals, however more comfortable, than traditional MetaTrader, i have not met.
Meta-trader versions 4 or 5 is considered the classic and best program for trading on the Forex market.In addition to the terminal, if necessary, download on the internet «advisers». maybe, need special indicators, missing in the standard set. Nothing more needed.
Stage 5. Opening and replenishment of a trading account
To start trading, you need not only to open a trading account, but also replenish it for a certain amount.
Minimum amount to start trading – not that, which the broker indicates in the trading conditions. The risk in each transaction should not exceed two percent from deposit, therefore, the minimum required amount is calculated individually in each case.
To activate the account is usually quite a little deposit, but if you do not increase it, the risk in each transaction will be too great.
Stage 6. Market price dynamics analysis
I note again, that there are 2 ways — analyze price history – that is, look at the charts and make predictions, or study the situation in the country – analyze GDP, interest rates and t. P.
The first option is called technical analysis, second – fundamental.
Simultaneous carrying out as technical, so fundamental analysis – a good way to get a complete picture of the market.
If you manage to identify market cycles – profits will be even higher. However remember, cycles change regularly, don’t forget to check with analytics.
Stage 7. Bidding
After the analysis, open the first deals and go directly to the auction. I would recommend you first get a stable profit on a demo account, only then invest your own money.
On a note
I attended the trading webinar and remembered the words of the presenter: «Learn to trade only on a live account». One side, it is right, because emotions when pouring real money into the market – not the same, that when speculating on a demo.
With another, pilots do not immediately get into real airplanes, when they learn to fly. Open real money transactions, not knowing anything about the financial market and not having trained on a demo account, stupid.
Trading on Forex trading or the stock market doesn’t necessarily mean opening a bunch of deals daily.
Many financial transactions are made by scalpers, but mid-term traders do not open new deals every day in a row. Long term – all the more.
By the way, here is one little, but useful sign. Created on materials «Advanced Trading», taught by his company trader Alexander Volverin.
Classification of trading strategies by time interval
|№||Type of strategy||Forex Time Interval||Stock Market Time Interval||How much time is needed per day|
|1||Long term||On average from a week to a month, but sometimes more, entry to the deal on the daily timeframe||Not less than a year||30 minutes a day or less|
|2||Medium term||2 days to a week, entry to the transaction on the H4 timeframe (4 hours)||Month to year||1 hour|
|3||Short term. Day trading||Intraday trading («introday»), entry to the transaction on timeframes from M15 (15 minutes) up to H1 (1 hour)||Up to a week||2-3 hours|
|4||Short term. Scalping||Trading at the smallest time intervals, entry into the transaction on timeframes from 1 minute to 5 minutes||Same, as in forex||2-3 hours or more|
About scalping – trader catches small price fluctuations, so the more he spends time, so he is better, it’s difficult to name a specific time frame.
How to succeed in online trading — 5 useful tips for a novice trader
The five tips below seem simple, but any professional trader knows, how important are they.
Advice relate primarily to psychology, however, this is not a reason to neglect them.
Tip 1. Do not risk large amounts within one transaction
I remind you again, what in each transaction you can not risk the amount, exceeding 2% from deposit. To make big profits, do not increase risks, and increase the amount of the account.
Warren Buffett does not recommend risking the amount at all, exceeding 0,1% capital in each transaction. The world does not know a more professional investor and stock player – think.
If you do not know how to calculate the loss, do not see the connection between the lot, shoulder and «pips» — don’t start trading at all. Get basic knowledge first.
Tip 2. Make transactions with only those amounts, which you can afford to spend
Never invest borrowed funds in trading. If the exchange player works with other people’s money through a PAMM account and loses it, he is not obliged to return the loss to the depositor, in terms of investment, this is clearly stated.
The ability to predict the market never gives a 100% guarantee of success, because forex, and stock or commodity exchanges sometimes bring surprises.
« …The monkey still does not lag behind playing with fire, until he burns his paws.»
E. T. A. Hoffman
Do not be like a monkey.
Tip 3. Be patient
Almost all people, giving fabulous money for training in trading, have illusions about their future. They think, what 10-20 lessons will turn them into mega-class traders.
Trader Anton Klevtsov says about this: «I have not seen much young pianists, all cool — at age». Tooting.
Trading – mastery. To become a successful speculator, besides training, need develop a trading skill, and its formation will take years of continuous trade.
Tip 4. Learn from your experience
I recommend that you have a thick notebook and paste charts with marked deals into it. Explain each transaction: why opened, where put Stop Loss and Take Profit, did they move.
Main question – why did you perform this or that action – always answer him.
Tip 5. Be disciplined
The emotions of a novice trader are almost do not differ from the feelings of a gambler. «Win» generates euphoria and loops on the installation «Everything! I will not play anymore!», because losing money is scary.
«Losing» either causes a desire to recoup and «double down», either immersed in despair.
In order not to lose money, strictly follow your trading strategy and do not give in to emotions!
Excessive emotions seem to cover the speculator’s eyes with a veil – he stops seeing the market because of fear or greed. Consequence – opens up obviously losing positions or misses out on really profitable ones.
Learn to control yourself. In the invested money you should see a consumable, which can be increased, and lose, including completely.
So that emotions do not prevail, do not start trading with words: «Today is my day! I will earn a lot!», start with a phrase like: «I lost everything». Imagine, what happened the worst, then fear will dissipate, you will become indifferent to price movements.