Trading financial instruments online is a risky business. You can lose all your investment capital and any profits made. Even so, without risk, there is no reward. With proper risk management and patience, there is a lot of money to be made. Find below, three online trading options that will make you rich.
Stock Market Trading
This is also known as the equity or share market. Companies
are constantly selling their shares to those with trading accounts,
intending to raise money for their operations. Become a shareholder in a
company by buying and selling their stocks. You choose whether you want to be
part owner in a publicly listed company, or in one that trades privately. A
public listed company will be found on a stock exchange in the country where
the company is based. Exchanges in other countries may also trade the same
stocks. The stocks may include oil, silver and gold, among others.
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Privately traded shares are usually done through equity
crowdfunding platforms. Depending on how many shares you buy, how the companies
perform annually and the trading strategy that you choose, this is one of the
online trading options that will make you rich.
Stock trading is usually done through brokerage firms and
electronic trading platforms.
Trading in Bonds
This is when you lend your money to an entity such as
government or publicly traded corporations, to finance large infrastructural
developments, or pay off huge debts. It is usually long-term and is typically
done through brokerage firms. Your money is consolidated with that of others to
get the total amounts to be lent out. As a lender, you get interest
paid to you on a term basis that could be once, twice or four times a year.
You do not need collateral to trade in bonds, but they are more highly
regulated by authorities. As a retail investor, you can buy bonds in relatively
small denominations as they will be put together with others’ trades. Buy
several bonds at relatively significant prices and this online trading option
will make you rich in time. This is a less risky option of online trading as
interest is paid up-front.
Trading in Foreign Exchange
Become a part of the $6 trillion-a-day, over-the-counter
currency exchange market that runs for 24 hours a day, 5 days a week, without
fail, except on weekends. It is global, decentralized and determines the
foreign exchange rates for every currency in the world. In terms of volume, it
is the largest financial market in the world. The participants in this market
are in several categories beginning with the large international banks on one
end, and retail investors on the other.
As a retail investor, you can trade individually online, or
you can use a “dealer” who will trade for you and pass on the profits to you,
less the commission charged. This latter way of trading may be very risky as
you may not be able to “prove” how much profit you made in a trade. It is
better to learn how to trade the markets as a retailer and enjoy your
profits. You can always learn how to do so from online tutorials and
signing up with reputable companies that will allow you to open demonstration
accounts. Use the demo account to learn the ropes, before investing real money
in live accounts. Once you master the basics and trading strategies, trading
foreign exchange is one of the online trading options that will make you rich.
You can always start with relatively small amounts of money and grow your
portfolio based on your risk appetite.
Final Thoughts
The web is a very useful place to obtain information before
starting your online trading. You should also have a trading strategy for the
options that you choose to engage in. Risk management, patience, and proper
planning will enable you to get involved in online trading options that will make
you rich.