With the downturn in the market being felt by everyone and not just investors it is little wonder that so many people are turning to alternative ways to make extra to help with their budgeting needs. There are some ways to make incremental additions to your base rate income like selling pictures online, doing paid surveys and writing articles through content broking websites. Unfortunately if you are looking to really give your monthly budget a boost these will not go far. One of the more common ways to make money online now is by trading in the stocks and shares market with companies like CMC markets. Although this is never risk free – there are some tips to setting up an online trading account in a way that does minimise the risk significantly.
Find the right online trading platform
This may sound like an obvious one but finding the correct online trading platform to support the kind of trades you want to make is essential. If your online trading platform specialises in stocks and shares but lets you trade CFD’s on a small scale it is likely you will be charged more fees for doing this than you would on an online trading platform that specialises in CFD’s. Ideally you want to find a trading platform that supports all of the markets equally so that you have the luxury of being able to trade in any instruments you wish to.
Make sure there is a mobile app
If you are going to seriously look at trading online as a way to boost your monthly budget with some extra cash then you need to dedicate yourself to it. Performing trades online to increase your capital is always going to carry a risk – but the more you can check the more you can minimise. The likelihood is that you will be doing this around your already full time job and will not be able to dedicate the whole day to online trading. Some trades like stocks and shares move incredibly quickly – so it is worth looking into downloading a mobile app.
The first thing to make sure is that your chosen online trading platform has a mobile app and the next thing to ensure is that you can perform actions with it. There are still some online trading platforms that only allow you to view your trades and not execute sell or buy orders which can be incredibly frustrating if you are losing money and cannot get to a computer.
Learn how to use stop loss and limit orders
Trading in stocks and shares, CFD’s or forex is never going to be something that carries no risk. The standard advice is to only invest what you can afford to lose. One of the more clever ways to minimise risk and try and maximise profit is to learn how to use stop loss and limit sell orders. Once you know how to use these you can set them up for a number of different trades and your account will run more or less automatically.
Limit order
A limit buy is an automatic order you can set up on your account to buy a trade when it drops to a certain level. Most online trading platforms will have information of what the share price has been over a certain period of time. All you need to do is see what the lowest point has been over a certain period of time and calculate what you think a realistic buying price would be in the market. This is especially good for volatile markets like forex.
Stop loss
Once you have done this you can set up a stop loss and limit sell order. The limit sell would be a price that the holding automatically sells to keep you in profit. So if the share price reaches what you have set it will automatically sell, which is something you can play to your advantage by setting a limit buy and then limit sell at the lowest and highest ends of the spectrum. A stop loss is an automatic sell you can set when your trade breaks even, so that you do not lose money.