What Is Online Trading?

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Start learning how to make money online here. Simply follow all the basic guides and you can become a professional trader with unlimited potential to make profits everyday.

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Okay, you might stumble here because you've heard that your neighbor suddenly got rich from online trading, or sort. By then, you got very curious and wondering how can those people got some fortunes from that so-called "work-from-your-home" trading buzz.

You come to the right place, my friend! We'll tell you the secret of earning money from online trading. Step by step, in a simple explanation even 5-year old can understand. First thing first, you need to know what online trading is!

online trading

 

What is Online Trading?

You know, online trading is actually not far different from traditional market. For instance, in order to gain profit you need to sell things that is priced higher than its original/base price. To do so, you need to find a buyer that is willing to bid at your asked price.

Most importantly, what makes online trading special is the fact that it can process thousand or even millions of bid and ask price from people across the globe in each second, non-stop. Simply put, it's a bustling planet-size market where no other traditional market could even compete with. It's so huge that it cannot fit physical space!

That's why it demands more flexible and spacious medium, which is what you know as the internet. The internet itself is the main force that makes online trading possible as it connects billions of personal devices to server machines. For that reason, now you can place a bid or ask order anywhere, at anytime while waiting briefly for another trader to pounce on your offer.

Next, prepare your pants to dive into a deeper online trading secret leaks!

 

How Online Trading Works

Let's avoid technical jargon and its whatnot, aye? We'll get right into the meat of it.

On a traditional market you have to engage physically either as a buyer to take home the goods or be a seller to make profit out of it. In comparison, online trading basically places your bid or ask price to be listed on a massive auction board. Under that condition, it is possible for any trader to switch position into a buyer or a seller in just a snap of a finger.

Yes, yes, think of it just like an auction system! So, let say you want to sell 10 piece of paper that are worth about $10 each. To do so, you'll post an ask price of $12/piece (so you can profit at least $2/piece). The server machine will then automatically broadcast your ask price to all of its interconnected participants. Needles to say, the number of participants can easily tally up to millions of traders. With that huge number in mind, your ask price will likely going to match a bid price of another trader in no time.

Let's say that trader bids for 10 papers @ $12. Kaboom! Now you successfully sold all your papers and turn it into $20 profit!

Yes, basically it's as simple as that!

Just remember that in order to gain profit you need to earn more than your expense. To do so, simply remember these magic words, "buys cheap, sells high". Onward, we'll learn why we should at least give a shot at online trading!

 

Why You Should Try Online Trading

According to some apparently legit report, in the future, people will earn less revenue. Even though current economic inflation progresses, millennials may be the first generation to earn less than their predecessor. That my friend, is truly mind-blowing!

The rise of big data and automation (put some terminator memes here) are predicted to be the big force that is going to put most of us out of employments! So, what to do with that?

To earn income at the same level as our predecessor we have to work smarter in the future, not harder! For instance, being good at creative industries and online trading! Yes, we can learn to earn extra income especially from online trading! With the knowledge of it, we can survive and prosper before all of those terminator machines dominate most of other ignorant people.

 

Two Sweet Secrets Of Online Trading

secrets of online trading

Online trading can come in various forms and offers, most commonly stock (equity) and currency trading. Many trader look after those two popular assets, mainly because of their liquidity.

In simple daily English, liquidity represents how easily traders can buy or sell a specified asset without extreme change in its current value. Therefore, it's very difficult for any single participant to manipulate price to lean in his favor just by selling or buying in a single large bulk.

In a non-liquid market, monopoly can frequently occur. It's like a mad baker trying to raise bread price by buying a humungous bulk of wheat grain in local granaries, so his weaker competitors will eventually die out. Capiche?

Conversely, in high liquidity environment, millions and millions of participants can easily buy or sell the very same asset with relatively fair prices. In that case, price will only move so slightly even though there's a single or two rich madmen dropping titanic bulk order every now and then.

To point that out, the most liquid market in the world is currently foreign exchange or Forex trading. In that market, traders buy or sell a pair of currency to accumulate floating profit. In order to do that, a trader can hold either buy or position over a period of time. The longer it is, the more profit they can potentially gain.

Formerly, only the rich blood can enter foreign exchange market as it requires a trading lot of 100,000 base currency unit to open a position. But nowadays, retail traders with limited capital can also join Forex trading with the help of broker's leverage. In short, leverage makes broker lend their money for your capital as a margin.

Don't worry, leverage is completely legal and relatively safe, plus it is interest-free! In fact, most retail trader have to use leverage if they're looking for some handsome return.

Remember, liquidity and leverage are your two best secrets when it comes to earning money by online trading!

 

So, How to be Professional at Online Trading?

Understanding the basic of online trading and its secrets are baby steps of becoming a pro at online trading. Of course, there's still a lot more to learn if you want to practice actual online trading situations.

Click this picture below to learn more about starting up currency trading:

currency trading for beginners

And also, click the picture box below to read a guide to pick best Forex broker for your Forex Trading:

forex brokers

If you want to figure out how to make consistent profit at Forex Trading, click the picture below:

how to earn consistent profit in forex trading

Rio Renata aktif menulis di Seputarforex sebagai penulis artikel forex dan broker dalam dua bahasa, khususnya mengenai aspek teknikal. Karena berlatar pendidikan psikologi, ia memandang pergerakan harga pasar layaknya dinamika perilaku individual, yaitu memiliki pola tertentu yang dapat diantisipasi.