Finance

The Top 3 Ways to Use a Trading Platform to Make Money

Whether you have just obtained your retirement pay or you have a sizeable amount of savings sitting in your bank account, many financial experts recommend that we invest our money in the stock market rather than allow the value of our savings to depreciate over time due to inflation. For many decades, investing money into trading platforms, observing proper risk management, and diversifying one’s portfolio has proved to be a great way to generate extra income without leaving the comforts of your home. Stocks, foreign currencies, cryptocurrencies, commodities, bonds, and exchange-traded funds are just some of the assets that you can access in the trading platforms.

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Since the value of investments grows over time, it is important for aspiring investors to start early and to have a definite game plan. Learn more about the top three ways to use a trading platform to earn money and start your journey to achieving financial freedom in the near future.

Long-Term Investments

Long-term investments are more of a passive form of income generation compared to day trading since you only need to buy assets at once or at definite intervals. After that, you will only need to monitor your assets and watch your money grow over months and years. Most of your time will be spent on researching for assets with the greatest potential and on processing documents to start your trading account. Long-term investments are usually done in the stock market. It is less common in foreign currency exchanges and not recommended with futures and other contracts with expiry dates.

There may be varying minimum investment deposits for every broker and it is up to you to decide how much your starting capital will be. Take into account though that the commission charge is computed as a flat rate per trade. A $5 trading fee would almost be negligible if we are speaking of thousands of dollars worth of a single trade compared to a smaller amount of $100 for example.

Day Trading

Day trading is a more time-intensive option compared to investing. It is usually done from Mondays to Fridays during business hours when the market is open. Regular trading would require around 15 to 40 hours each week for monitoring the prices, creating orders, and in analyzing daily reports. Like long-term investments, day trading also requires discipline and patience before you can expect good results. Being unbiased and separating your emotions for every trade are just some of the challenges in day trading. It also requires traders to have a good knowledge of the market and skills in technical analysis. As usual, do your research before trading and know the optimal hours of the day to trade.

CFD Trading

CFD or contract for difference is a type of trading that allows traders to speculate into currencies, stocks, indices, and commodities without actually owning the asset. As its name suggests, CFD trading is a contract between the buyer and the seller, where traders can support large market positions even with small deposits. With CFD trading, you can profit whether the market is rising or falling as long as you can correctly predict where the price is heading. Avoid overtrading as it can expose your account to serious losses. Start your journey with CFD trading on Trade Direct today and experience lower fees and fixed spreads, gain access to over 400 ASX shares, and expect better tradings returns.

My Say

Trading, when done sensibly and with proper appreciation of risks associated with participating in the financial markets has great potentials for people to make money.

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