Online trading has become a worldwide phenomena in the last decade. And that’s without counting the boost received in the last year from the stay-at-home orders received by people across all over the world because of the Pandemic Crisis.
Still, there is much to learn about the subject, and future traders should be aware of what to do and search for before opening a trading account. That is why we decided, after an extensive series of researches and intel gathered on reliable sources such as this site about trading, to write down an article for beginner traders.
Furthermore, we also decided to suggest and describe the services of some of the best brokerage firms available today to start trading.
With all that being said, let’s see in detail what online trading is and how it works.
Online Trading And OTC Markets
Online trading lets you trade financial assets on the so-called over-the-counter (OTC) markets.
OTC markets do not have a physical place where they stand such as the NYSE or Tokyo Stock Exchange and all the operations performed in it are done via the internet or phone. That’s why it made them the perfect environment for this kind of trading.
Because of the fact of not having an actual location, OTCs are active 5 days and half a week 24h and make it possible to trade whenever and wherever you want. The only thing you need to do is to access a trading platform with a trading account given by a brokerage service.
Essential Features For A Broker
There are dozens and dozens of brokers on the net, but not all of them will fit your needs. Moreover, not all of them will stand to what we believe should be the essential feature for a broker.
First of all, you should always remember that a broker must be regulated from a regulator entity in order to be trustworthy. Any form of financial brokerage that is not in possession of a license by a national or international regulator is not a good investment for your capitals. By opening a trading account with a non-regulated, you’ll go towards scams and financial losses.
Another feature which should never be underestimated by a newcomer should be the possibility of using a demo. Demo accounts make it possible for you to look at with your own eyes at what is capable of the selected trading platform and compare more brokers between them.
Last but not least, you should also be careful regarding fees and commissions to cover once you start trading. Most brokers today do not charge for trading commissions for example, while others have competitive spreads from which you may gain big profits with the right trading strategy.
With all that being said, we decided to pick on brokers in particular that respect all of those features which are essential for both brokers and traders: AvaTrade.
AvaTrade is one of the most interesting brokerage services for the Forex market and one of the best options for those especially interested in trying out a trading platform with a demo account.
In fact, their demo account has many special features, including the possibility of using a virtual balance that lets you use up to 100.000 USD in fake money. With that (fake) amount of money, you’ll have plenty of possibilities for your trading strategies and ideas.
In terms of CFD instruments instead, you will have access to powerful platforms and manage your trades manually through the extensive usage of MetTrader4 and MetaTrader5, or use automated trading platforms. In this service is also included the chance to use leverage on numerous CFDs, a thing which will amplify your exposure to the financial markets, and so it will be the outcome of your investment.
With AvaTrade you can trade on a variety of assets included:
- Stock Trading: thanks to AvaTrade you can BUY and SELL CFDs stocks of the most important companies listed on major stock exchanges across the world such as NASDAQ, NYSE and LSE. Those instruments can be traded with a leverage of 5:1 and a Margin of 20% and include names like Tesla, Facebook, Amazon and Apple.
- Indices: these financial derivatives are calculated as a weighted average of share prices of the top performing companies listed on specific exchanges. They comprehend leading Asian, European and American stock indices such as the Chinese China A50, Germany’s DAX, the US S&P 500 and Japan’s NIKKEI.
- Bonds & Treasuries: they can be traded as CFDs on MT4, MT5 and the Web Trader. It includes Japanese & European government bonds and can be traded with competitive spreads and a leverage of up to 5:3.
- Cryptocurrency: on AvaTrade you cannot possess cryptos but you can speculate on their high volatility thanks to CFDs as any other financial assets present on the markets. Cryptocurrencies traded with this broker goes from Bitcoin, Ethereum and other alt-coins such as Litecoin and EOS.
You can try AvaTrade services with a risk-free 21-day demo account and try any of the trading platforms included in the service.