| Learning how to trade is a process. Not only will you need to educate yourself, but you will also have to be patient as you garner experience. Trading the capital markets is a business. It might take hours of your time or just be a part time endeavor. Either way, building your trading portfolio takes time and effort. Here are 5-steps you should take to learn how to trade the capital markets. |
| 1) What Products are Available? |
| When you trade, you are buying or selling an asset. An asset could be a physical item like a house or a bar of gold, but in most cases, you will be buying and selling a financial product. A financial instrument is generally an investment product that tracks the movements of an underlying instrument. You can buy CFDs (Contract for Difference) on commodities, indices, currencies, shares, cryptos or ETFs. The first step in your education process is to learn about the different products that are available for you to trade. |
| 2) Find a Broker |
| Once you have had a chance to learn a little about the different products that are available, the next step is to find a broker that will facilitate trading. A Forex broker will offer you access to a variety of financial instruments. These instruments could be exchange traded as contracts for differences. There are many ways to take a view using several different types of financial product that a broker can offer. You want to make sure that your broker is reliable and if possible, regulated. If your broker is inexperienced this should be a red flag. |
| 3) Look at Your Brokers Education Portal |
| The broker you choose should have a robust education portal that should help you learn how to use their trading platform as well as educate you on the different markets that they offer. They should talk about the different analysis that you can use to generate a trading view as well as discuss how to develop a trading strategy. Many brokers will offer an economic calendar that will list the schedule of different events that are expected to occur. |
| 4) Learn about Risk Management |
| One of the most important concepts that you need to master is risk management. This determines how much you want to risk and what reward you expect for that risk. There are several ways to measure risk. You can measure it based on your financial goals or based on historical volatility. What you should try to determine is what are your financial goals. What you should understand is the more you risk the larger your potential reward. Risk is a key part of trading and you should also understand that you are going to lose money on trades. The key is to succeed making more than you lose. |
| 5) Use a Demo Account |
| Before you begin to risk real capital, you should spend some time testing your strategies and risk management using a demo account. A demonstration account, similar the one offered by iFOREX, allows you to test drive your broker’s platform using demo money. Once you become comfortable with the platform and your strategy, you can then begin to trade with real money. |