Considering Trading from Home? 6 Things to Know
Want to start trading from home? Learn about the risks involved and how to start trading from home below.
Table of Contents
Considering Trading from Home? 6 Things to Know
1. Choose a broker
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.
2. Open a live or 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 skill set until you are ready to go live.
3. Choose a market and master it
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 really master it. One of the most common markets for beginners to start trading on is the foreign exchange, or forex market.
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 on. There is a wide range of trading strategies available so educate yourself on the different types, choose one and stick to it.
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 does 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.
Trading from Home Tools
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 Admirals, 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 Admirals mobile trading app. Deciding how you will make trading decisions is important to ensure you have the right tools to trade from home. You can also access customer support or tune into live trading webinars.
Forex Trading from Home
Forex trading home involves speculating on the price direction of different currency pairs within the foreign exchange market. There are a wide range of currency pairs to choose from that are categorised into major, minor and exotics.
The major currency pairs include EURUSD, GBPUSD, AUDUSD, NZDUSD, USDCAD, USDCHF and USDJPY. 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.
Stock Trading 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 are 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.
Learn more about online share trading in the ‘Investing in Shares for Beginners Guide.’
One of the best ways to get started trading from home is to use a demo trading account. This allows you to trade in a virtual environment until you are ready to go live and is useful in testing all the different features and products a broker offers you.
FAQs on Trading from Home
Can you make a living as a day trader?
There are those who do make a living as day traders but many more that will fail at it. Start with a demo account, educate yourself and practice to see if it will work for you or not.
How do I become a trader from home?
To start trading from home you need a broker, a platform, a market, education, strategies and sound risk management principles.
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 Admirals investment firms operating under the Admirals trademark (hereinafter “Admirals”). 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 Admirals 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, Admirals 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, Admirals 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 Admirals 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.
