Start Trading From Home in 6 Steps - Stocks, Forex, Commodities
The financial markets are now more accessible than ever before. More and more people are learning how to trade from home. All you need is an internet connection, a laptop and a broker to get started. Of course, to find good performance requires time, skill, education and patience.
If you are interested in how to start trading from home in markets such as FX, stocks and commodities, then read this full guide.
Table of Contents
What is Trading from Home?
Trillions of dollars move around the world's financial markets every single day. When trading from home, traders attempt to try and profit from price swings in the different financial markets available. This includes stocks, forex, commodities, indices and others. There are professional traders in Wall Street and the City of London who do this for a living using advanced strategies and techniques.
However, while not easy, there is a growing number of retail traders (those not classed as professionals) who are trading from home and speculating on the world's financial markets.
How to Trade from Home in 6 Steps
Here are six things to know to start online trading.
1. Choose a broker wisely
Your gateway to the world’s financial markets is through a broker. Brokers vary in the safety and quality they provide. Stick to highly regulated brokers that offer good customer support, and a range of markets and platforms to trade from. For example, Admiral Markets is authorised and regulated by multiple regulators including the UK Financial Conduct Authority (FCA), the Cyprus Securities Exchange Commission (CySEC), the Jordan Securities Commission (JSC) and many others.
2. Start with a demo account
A live trading account requires you to fund the account with real money to speculate on financial markets. It is wiser to start with a demo trading account first of all as these allow you to trade in a virtual environment to build up your skills until you are ready to go live. After all, trading money in real conditions requires an emotional mindset that some are not yet ready for. Experiencing this on a demo account helps you to identify any weaknesses so you can improve on them.
3. Choose a market and master it
With Admiral Markets, you can trade stocks, indices, commodities, forex, bonds and many other types of markets. It is best to stick to one market, to begin with and master it. One of the most common markets for beginners to start trading on is the foreign exchange or forex market. Check out the How to Start Forex Trading Guide to learn more about forex trading.
4. Educate yourself with trading strategies
A trading strategy is a list of rules that help you navigate and analyse the market you are trading in. There is a wide range of trading strategies available so educate yourself on the different types, choose one and stick to it. To begin with, you will need to identify your style of trading and this may come down to the time you have available. Will you be an end-of-day trader from home as you are working during the day? Or will you try and be a day trader speculating on financial market price movements throughout the day?
5. Exercise proper risk management
Trading the financial market successfully requires proper risk management. There will be winning trades and losing trades. Be sure to keep your risk small to stay in the game long enough so a few losing trades do not wipe out your starting capital.
6. Master your mindset
Trading from home requires a high level of emotional mastery. Handling the emotions of losing trades, days where you don’t even find a trade can be challenging for many. Listen to other traders through different live trading webinars to help build the right mindset.
Online Trading Tools to Get Started
When trading from home, it is important to have the right tools at your disposal. One of the most important tools is your trading platform.
What is a trading platform? A trading platform allows you to view the live price charts of different markets, analyse them using different technical analysis tools and then route any trading instructions to your broker.
With Admiral Markets, you can trade from the MetaTrader 4 and MetaTrader 5 trading platforms for desktop and web. You can also upgrade your MetaTrader platform with the Supreme Edition plugin which provides you access to extra tools including a correlation matrix, a mini-terminal for faster execution and more indicators.
Alternatively, you could use the Admiral Markets mobile trading app. Deciding how you will make trading decisions is important to ensure you have the right tools to trade from home.
FX Trading from Home
Forex trading home involves speculating on the price direction of different currency pairs within the foreign exchange market. There is a wide range of currency pairs to choose from that are categorised into major, minor and exotics.
The major currency pairs include EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/CAD, USD/CHF and USD/JPY. These are the most actively traded currencies and will usually provide the lowest spread (which is just one cost of trading) making them the best currency pairs to start off with.
One reason learning how to trade forex from home is popular is because the market is open 24 hours a day, 5 days a week providing different types of opportunities throughout the day. Another reason is that currencies are traded via CFDs or contracts for difference.
CFDs allow forex traders to speculate on rising and falling prices using leverage. This means you can control a larger position using a smaller deposit. This will amplify winning trades and losing trades which is why training yourself in risk management on a demo account is a wise place to start.
How to Trade Stocks from Home
Stock trading from home involves speculation of the share price of different companies listed on public stock exchanges. For example, you can speculate on the share price of stocks listed on the London Stock Exchange such as Lloyds or BP, or on the New York Stock Exchange such as Apple or Disney.
There is a wide range of stock categories. Some of the most well-known stocks or companies are known as blue chip stocks. These are businesses that have been around for years and are an integral part of the economy and everyday life such as Apple or McDonalds.
Another type of stock category is penny stocks. These are typically small and new companies that are trying to grow into larger, blue-chip stocks. As they are new, the share price is extremely volatile and not suitable for beginner traders.
Below is the price chart of Apple's share price.
When share trading from home, traders will use different types of analysis techniques to determine the future share price direction. This can include fundamental analysis such as company reports and earnings announcements. Or, it could be technical analysis which is the study of chart patterns and technical indicators.
Conclusion
Thanks to advances in technology, trading from home is now possible for more individuals. While not easy, many retail traders are speculating on the price direction of different stocks, currency pairs and commodity markets. Trading with a regulated broker is essential to keep your capital safe but having access to the right markets and trading platforms is also key.
One of the best ways to get started is to use a demo trading account. This allows you to trade from home in a virtual environment so you can practice your skills and test your ideas. Once you are more confident then you can transition to a live account.
Other articles you may find interesting:
- How to Start Forex Trading Guide
- Learn How to Trade Online
- How to Trade Futures
- Day Trading Tips
- How to Trade with MetaTrader WebTrader
- How to use the Admiral Markets Dashboard
FAQs on Trading from Home
Can you make a living from online trading?
There are those who do make a living from online trading but many more that will fail at it. It really comes down to you and how you trading yourself to build the right skills to trade the market online successfully. Start with a demo account, educate yourself and practice to see if it will work for you or not.
How do I start trading online?
To start trading online you need to choose a regulated broker, identify the markets you want to trade, educate yourself in technical and fundamental analysis, and develop a strategy with a list of rules and practice on a demo account to learn about the emotional and psychological side of trading.
INFORMATION ABOUT ANALYTICAL MATERIALS:
The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admiral Markets investment firms operating under the Admiral Markets trademark (hereinafter “Admiral Markets”). Before making any investment decisions please pay close attention to the following:
1. This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
2. Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content.
3. With view to protecting the interests of our clients and the objectivity of the Analysis, Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
4. The Analysis is prepared by an independent analyst, Jitanchandra Solanki, (hereinafter “Author”) based on personal estimations.
5. Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis.
6. Any kind of past or modelled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
7. Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the risks involved.
