📘 Lesson 1. Online trading: what, why, where

In the 2020s, trading has become a very important part of our lives. It’s common practice now not only to save money for the future but also to use it here and now to get additional income. We have no doubts that at least several people you know trade in the financial market.

Do you want to be among those who buy and sell various currencies, stocks, and metals? Then this short course is for you. You will discover the instruments the financial market has to offer and will be able to make your first steps in trading.

In this course, you will meet trader Festus – a beginner who is also learning how to trade. He will ask his questions, and we will provide answers.

Are you ready to become a real trader? Let’s start!

We can break these instruments into several categories:

Trading is actually a very wide sphere. It happens all the time: people and companies constantly exchange different financial assets. You have already taken part in this process. When one travels from Europe to Japan, you exchange euros for yens; you actually act in the Forex market. When American firms get pounds for selling things in the UK and then exchange these pounds for dollars, they trade in the Forex market as well.

Online trading is about buying and selling financial instruments with a specific goal of earning money. Traders look for assets that are cheap to buy them and then sell at a higher price. In addition, they can benefit from opening a sell trade if the price of an instrument that they have chosen, for example, the EURUSD currency pair, declines.

In the picture below, you may see the price chart of gold (XAUUSD) and the levels at which a trader could have opened and closed their trade.

✅ Why trade online?

Every person cares about their personal finance. The natural goals are to save money from inflation and increase capital. Trading offers a way to achieve these goals. Many people choose trading not only as a money-bringing hobby but also as a profession. In both cases, trading is often seen as a way to financial freedom.

Compared with other ways to raise money, trading has the following advantages:

• You will need your mobile device, a laptop, or a desktop with an Internet connection, nothing more;
• You can learn by practicing with virtual funds before you trade with your actual money;
• You can borrow funds from your broker, i.e., use leverage, to increase your potential profit;
• You can do trading when you have time;
• You can trade on the news and keep increasing your knowledge about finance.

⚙️ How to trade?

The logic of trading is quite simple: if you expect the price of gold to increase in a week, you buy gold. If your forecast was correct, in a week you close your trade and cheer at your profit. How exactly does it happen in real life?

You need to open a trading program MetaTrader, click on a ‘new order,’ and then choose ‘buy.’ When you open a trade, you usually have some target price in mind at which you will take your profit. When the price reaches this point, you end your trade, i.e., close your order.

Traders who expect the prices to rise are called ‘bulls,’ while those who expect a decline are referred to as ‘bears.’ A buy trade is also known as a ‘long position,’ while a sell trade is also called a ‘short’ position.

📱 Things you need to start trading

It’s not a long list! One thing you already have is access to the Internet. Another necessary thing is a trading platform(s). Getting it/them is also quite simple: you can download the software using the link on the website or in stores (App Store or Google Play).