Online trading: definition, styles and tools to get started3 min read
You are surely hearing more and more about Online Trading and rightly so, because many individuals decide to get into it in order to try to increase their income, or even to make it their profession!
In this article we will define for you what online trading is, the vocabulary related to trading, all the essential elements to master and allow you to learn how online trading works as well as these explanations.
What is Online Trading – Definition of Online Trading
✍️ Trading consists of buying and selling financial securities via an online trading platform or a mobile trading application. These online trading software are made available to traders, usually free of charge, by brokers on the internet. They are accessible to anyone wishing to invest in the stock market and trade financial instruments on the markets.
Online trading is a serious business and not an entertaining way to quickly earn a lot of money without risk and without training. Apart from that, it is true that online trading is accessible to anyone who is ready to work hard and be 100% involved in this activity where psychology is a daily challenge.
You have surely already wondered who are the people, companies or institutions present on the financial markets, without necessarily understanding the role of each.
The most important players in the financial markets are:
- Central banks
- Hedge Funds
- Investment Funds
- Brokers (or brokers)
- Professional Investors (Trader)
- Individual Investors (Trader)
What is a Trader?
The definition of a trader is an investor who finances his capital and who has 3 profiles:
1️) The analyst
The trader analyzes the context in which a particular instrument finds itself, using fundamental analysis and technical analysis.
These analyzes will allow the trader to understand the environment, to know what the trend of the asset is, if it is over or under rated and to help him in his decision-making.
2) The risk manager
The trader buys and sells financial instruments, such as the EURUSD or the DAX 40 index with the aim of making gains. These are based on the difference between the buying and selling price of the trading positions, minus the broker’s fees.
3) The decision maker
The trader is a risk manager since he must above all calculate the risk he takes on the markets in order to achieve profitability and continue his activity over the long term.
As you will have understood, a trader must be able to multiply his skills in order to carry out his online trading activity in the best conditions. But a trader is above all an expert in the financial markets , mastering their functioning, how to interpret them and reading the price fluctuations on the trading charts in order to profit from them.
There are several known traders in France and around the world. Discovering their methods and techniques would also be a good way to understand the different existing strategies.
Are you a beginner trader? Don’t worry, trading can be learned. Admirals offers training to introduce you to trading.