In today’s seesaw economy, huge numbers of working adults are searching for a second paycheck or at least another income stream. That doesn’t always mean going out and hunting for a traditional office job that comes with regular hours, daily commutes by car, and all the underpinnings of being an employee. The modern way of adding income to the monthly budget without taking on a nine-to-five or part-time job is to work online. While there are thousands of work-from-home opportunities in the digital era, few offer the immense freedom and unlimited financial potential of being an online trader.
Finding personal economic independence via a full-time trading job is not only realistic and achievable for most, but the work can be deeply rewarding, interesting, and profitable. Few individuals dive directly into a trading-from-home career. That caution applies to all, including those who are credentialed, degreed, and trained in the field. Regardless of how much trading experience you have, it’s important to follow a series of definitive steps to build a profitable practice as an at-home online trader.
Unlike working for a brokerage firm or bank, where you’d be investing clients’ money on their behalf, working on your own means all the profits, losses, headaches, victories, challenges, and accomplishments are yours alone. If you want to create a situation in which you don’t need to rely on another source of income outside of trading online, it’s essential to become familiar with the following steps before getting started. While you might be able to skip one or two of them, be sure that you can meet or exceed all the suggested requirements for each one.
Specialize From the Beginning
Unless you are an incredible multi-tasker who loves to do it all, start your journey into the world of full-time trading by selecting just one asset. Then, learn everything you can about it by reading articles on reputable financial news and investing websites. You might consider stocks, commodities, precious metals, forex, cryptocurrency, or one of dozens of other selections. Keep in mind that there are no best choices. That’s because all the groups come with a unique set of advantages and disadvantages.
Consider your current schedule, budget, and knowledge. If you have limited time, it might make more sense to swing trade corporate stocks. But if you control your schedule and have ample time to trade, forex might make more sense because of the constant action and 24-hour market access. Further, be honest about how much capital you have available to begin. If it’s minimal, forex or low cap equity shares could work for your initial foray into the markets. Experiment with various choices, and don’t feel the need to decide for a few weeks at least.
Practice Placing & Following Trades
Fortunately, most of the top brokerage platforms allow for trading on a demo account. That means new customers can set up a simulated environment in which they use fictitious funds to make transactions in real-time. There’s no winning or losing because the money is not real, but the lessons learned are essential to your long-term success as a trading professional. While every platform has a slightly different demo or sim account system, most operate the same way. You sign up for a basic account and are given a password to use the simulator.
Spend time experimenting with the several asset classes that seem to be a good fit for your financial goals and trading style. Practice placing different kinds of orders, managing positions as they unfold, and exiting whenever necessary. There is not the same amount of pressure to do well when you use fake money, but it is entirely possible to sharpen your skills, get accustomed to the give and take of the marketplace, and understand which assets you prefer to trade.
Choose a Strategy
Spend a few months working with different popular strategies, all of which have their own entry, stop loss, exit, profit taking, trade management, and risk control rules. There are dozens, so stick to the top-rated ones and see which suits your style and temperament best. In the end, it won’t be the strategy that makes you a good trader. Instead, your long-term success will hinge on how well you follow the rules and keep emotion out of the equation.
Learn From Mistakes & Backtesting
Review results every few days and do an honest assessment of where you went wrong. Mistakes can be excellent learning tools. Likewise, when trying a new technique or strategy, do backtesting to see how the method would have held up under real-world conditions.