We’ve all seen the movies portraying the hustle and bustle of trading as a wealth filled millionaires playground, so now that online trading is perfectly accessible to all of us with just a few clicks of a button, you may well be wondering if you too can get rich from trading online?
Can you get rich from trading online? Granted, there are many people who have made millions from online trading - so yes, it is possible to get rich from trading online but you should know that getting rich from trading online is absolutely not guaranteed and is dependent on a number of factors.
You can expect to do well from online trading if you have a flair for it, know what you’re doing, enjoy it, invest for long enough and know the rules to play by.
Be aware though that trading online is not a get rich quick scheme and you will definitely lose money along the way too.
American stock investor Bernard Baruch once said:
“In trading/investing, it’s not about how much you make but rather how much you don’t lose.”
This highlights that there is no quick route to getting rich through trading online and you need to put in the time to learn the rules of trading, build a strategy suitable for you and the market you’re operating in and have a healthy attitude to risk in order to stand a chance of not regularly losing more than you make.
If you’re intrigued about online trading and would like to learn how and when to make trades that will help to get you on your way to making your own cold hard cash, trading educators like the team here at Trade Room Plus can help.
In the rest of this article we will give you an overview of how you can get the best understanding of online trading and make sound judgements regarding risk in order to give you the best possible chance of getting rich from trading online.
Get Rich Tips For Online Trading
Simply put, online trading is buying and selling financial securities and derivatives online with the intention of making a profit. The main tradable financial assets include shares, commodities, futures, currencies and bonds.
To stand a chance of getting rich from trading you must be prepared to invest and lose money as well as following the basic principles below:
- Have a plan
- Never over trade
- Always have a stop loss and target
- Trade only when you understand the markets you operate in
- Understand your own trading psychology
- Understand risk/reward and when to take risks
- Learn from the best
Have A Plan
A traders plan is called a trading strategy and it is designed to give them the tools they need in order to know when and how to buy or sell the securities they are invested in.
A good trading strategy will guide a trader through the rules, objectives, risk tolerance and timeframe of trades that will form the basis of their investment decisions. Find out more about trading strategies here.
Never Over Trade
Over trading simply means engaging in more trades than can be supported by the market or the funds and resources available to you such as money and time. This is all too easy to do when you get a thrill or a fright from your current investment performance!
Always Have A Stop Loss And Target
When a profit target on a trade is reached, you should close your position without hesitation. The best traders don’t hold on in the hope of achieving more profit and when a trade takes a downwards turn.
Good traders will calmly cut their losses and close the position or wait for their stop loss to kick in. By using stop-loss orders on your trades, you can limit the loss on a security position by setting an order to buy or sell when the stock reaches a certain price.
Trade Only When You Understand The Markets You Operate In
There are so many options when it comes to choosing the markets you will trade in. Whether you choose stocks, bonds, forex, options and derivatives or physical assets, you should thoroughly research it and understand its quirks, trends and statistics before investing any money.
Understand Your Own Trading Psychology
We place a big emphasis on trading psychology at Trade Room Plus because the way you approach trades, and the way that you react to wins and losses is just as important, if not more important, as being able to determine the direction of a stock’s trend or evaluate investment vehicles.
To become a great trader you will need to be able to control fear and greed in order to remain disciplined in your trading actions. Find out more about training psychology and what you need to be aware of here.
Understand Risk/Reward And When To Take Risks
As there are no guarantees in trading, every trade is a risk and traders need to make their decisions on when to buy and sell with careful risk versus reward calculations.
Generally speaking 1:1.5 is seen as an ideal risk ratio to start and is calculated by dividing the amount you stand to lose if the price of an asset moves in an unexpected direction (the risk) by the amount of profit that is expected when the position is closed (the reward.) Find out more about the risks of online trading and how to mitigate them here.
Learn From The Best
There is no better way to learn that seeing something in action right in front of your eyes. At Trade Room Plus we teach the theory, the strategies, the planning and the trading discipline you need in order to succeed in online trading.
By trading live in front of our members and thousands of aspiring traders on YouTube every single day, we share the very same trading strategies we use ourselves so you can see them working before using them yourself inline with our trade signals.
As you become more experienced at trading, you will also be able to learn from your own mistakes and successes. We recommended that you always keep a trading diary so you can look back and analyse what worked and what didn’t so you can do more of the things that worked well.
Ultimately, the potential rewards from trading are brilliant, so if you like being in sole control of your own financial success and thrive making high pressured decisions, then what are you waiting for? Learn how to trade with a reputable trading educator, practice and practice some more, find an online broker to set up your trading account with, and get stuck in!
Find Out More
Whether your idea of getting rich is making enough money to retire early in the countryside or living a jet setting lifestyle with cars, boats and holidays galore, we hope this article has given you a simple overview of the key things to be aware of if you’re looking to make serious money from trading online.
We’ll leave you with this quote from Alexander Elder, another successful trader, to remind you that if you’re looking to trade online because you’re solely interested in getting rich, you should instead focus on getting the trade to work first because although money is a great reward, it only comes from a successful trade.
“The goal of a successful trader is to make the best trades. Money is secondary.”Alexander Elder
To keep learning how to get trades to work, we have plenty more guides available including; learn how to trade profitably and how our live trade room teaches you to trade profitably.
At Trade Room Plus we have been showing our customers how to trade Forex, Index and Crypto markets on spread bet and CFD broker platforms since 2013 and we offer a comprehensive but accessible way to learn how to trade forex, start day trading, understand when to enter and exit a trade and how to improve your profitability.