Benefits And Risks Of Online Trading - 5 Best Practices For Minimizing Losses And Plus500 Trading Platform
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Benefits And Risks Of Online Trading   -   5 Best Practices for Minimizing Losses And Plus500 Trading Platform

Does not matter what you are trading (forex, commodities, shares, CFD, index), every investment is a risk. Nonetheless if you are careful and find some good strategies you can minimize the risks. But let me emphasize on the word minimize (it is still risky).

Trading online has lots of benefits, you can instantly find the current quotation without venturing outside plus you can check multiple trading records dating from the begging to the most current. Another benefits is that you can trade forex 24h a day.

But trading online is still risky just as trading offline. You can never predict when will the prices drop or rise, you can check historical data and speculate but you cannot guarantee that it will rise or fall.

My advice is to trade CFD (leverage) simply because you will not deposit all your money and as a result you will not held any stock but you will still trade and if all goes well make money. CFD is still risky but you can set an out trade when the market reaches a certain price (either fall or rise). Plus you will receive an instant message saying that your trade reached the set price and you are xyz profit. This is one of the best advantages of online trading.

There are many online platforms on the market, my favourite is Plus500 simple because it is easy to use. You can trade on the website or by downloading an app that works on mobiles, tablets and Pc. So you can carry with you whenever you go. Plus they offer huge bonuses on first deposit which is a great way to start your investment.

No matter what platform you use, online trading just like any other investment is very risky, below are my 5 best practices for minimizing losses:

#1 stay away from penny stocks: there is a trend of penny stocks and from my experience penny stocks are the most risky business you will ever get. Simply because a company of the fact that if a company is offering tens of thousands of stocks for pennies means that it is simply getting bankrupt. So stay away from penny stocks!

#2 trade on companies that have history: find the historical data and find the facts of the company that you are willing to invest. Huge companies can still go out of business or merge with other companies but the fact is that companies with history tend to live and stay on the market for longer.

#3 so not really on periodical sales data: some people think that buying and selling shares during certain events such as Christmas or during a launch of a new product, etc impacts the stock prices. In some cases but not in all of them, so do not really on this events. Do not get me wrong, keeping update with the market is a good think and I advice everyone to keep updated but the fact is that you can only speculate and a speculating is a risky business. I am just telling you from my own experience that trading is risky and unpredictable.

#4 spread your bets: investing in multiple companies is better than just concentrating on a single commodity. This is good practice to minimizing losses simply because you can recoup your losses from other good trades.

#5 do not really on software predictions: there are many softwares on the market that predicts whenever the stock will rise or fall. These softwares will only tell you based on the parameters that was set by the developer and they are based on predictions. It is all speculative not at all accurate the software will only make predictions based on the historical data. There is absolutely no way to get accurate predictions!

To sum up, trading is a speculative business not at all predictable. There are ways to minimize losses but still risky, so trade with what you can afford to lose.

If you want to know more about plus500 trading platform visit this plus500 review page and find out how to get £20 welcome bonus.


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