Updated: Sep 30
I wanted to get an idea of what a potential client really wants to ask me but may feel a bit intimidated or silly to do so. There is no such thing as a stupid question only stupid answers.
So I asked my sister, great guinea pig 😊, who is always questioning me about my job, what she would want to know about trading online if she wanted to start, since she has not got a clue.
So, we did a simple question and answer session which I hope may be helpful to others considering trying it.
So, let’s have a laugh.
How do I buy a company like Tesla before it goes up in price? 😊
Ok, when trading online, which is known as Forex or CFD’s, we do not actually buy a stock, we trade the movement of the price, so if you speculated Tesla would rise so steeply this year and you traded it long( she looked a bit confused here), I mean up/high you would have made some good money as long as you knew when to close the trade. In terms of knowing which stock will go up, you need to do research or get insights from your brokerage and information available to you, but nobody has a crystal ball.
How do I know how to press the buttons, I have no idea?
Ok, simple answer, platforms which the brokers offer are basically computer displays tailored to allow you to trade electronically. They have made them simple to use and with the help of customer support and practice on a demo account, this should be easy to get to grips with, trust me, that is the least of the challenges of trading. As you get more experienced, you will want to learn strategies and use specific algorithms to assist. She looked a bit lost, but I think she got it.
How quickly can I make money?
Common question, Firstly you have got to get to grips about opening and closing trades, then you need to have a plan, what do you want to trade, when do you want to trade. It depends on the individual, I have known newcomers become full time successful professional traders and I also know many others that jump into the market when they see an opportunity of have some spare cash to speculate the market.
How much money does it cost?
Ok, good question, each brokerage is in it to make money as well, so they will be willing to offer you a demo account but if you want to start for real you need to deposit some real funds. Most offer an initial deposit of between £100 -£250 to start. I would suggest just starting with a small amount. However, as you get to grips with it, you may want to diversify your trades and use money management techniques, but that is for the future.
Can I make money on my demo account?
Ok, I did not laugh because this is a question often asked. No, the demo account is for you to experiment without losing your real money, to understand the mechanics of trading and the platform and to know all the assets available and practice strategies. People that just trade on the demo account and never venture into the real market will never learn using emotions etc. so it is good to use a demo but also when confident take a punt in the real world.
Is my money safe?
Good question, check the broker, see if they are regulated covering the country you are from and yes, your funds are safe.
What details do I need to open an account; do I need a degree?
No, you don’t, some of the best currency traders never went to high school. You need to verify your account, with proof of who you are and proof where your funds came from, anti-money laundering. This is a two-sided sword; the broker must also comply with their regulators. This can be done very quickly online using your camera phone as an example.
What if I do not like it and want to stop?
No problem, you can withdraw your money at any stage, some may charge a small admiration fee. You can keep the account active or ask for it to be closed.
If I make money do I have to tell the tax man.
It depends on your country and the amount you make, so if you make big money, get specialist advice such as your accountant. That is a nice problem to have.
Will I get help.
Yes, it depends on what you are looking for, most brokers offer great educational tools on their platforms and have customer support teams to assist. This is what I offer sis! There are also many webinars and tutorials all over the web, but practice makes good.
To conclude, I hope this answers some basic questions and as a side note, my sister is very successful in her own field, so no hard feelings.