An easy approach to online trading: How to become an online trader and learn the introductory information that are necessary to be successful in this market

By Stefano Calicchio

Are you interested in Trading, but you do not know how to start? Would you like to become a professional investor and know how financial markets work? Do you want to create an alternative activity without working hours, no bosses or managers who oversee you? If so, Online trading is the solution you were looking for! Yet, be careful, because we are talking about a hard task which is not suitable for everybody. Nevertheless, this guide can hold your hand and introduce you to the world of the stock market by explaining all the trading foundations: from operating strategies to markets where you can invest your money; from order types to the definition of a portfolio and the brokers' choice; from the stock market investigations to the Money Management and Risk Management concepts.
All this information can be found in this guide in a simple, practical and affordable way, and will allow you to learn quickly all the starting skills. Stop wasting your time and discover immediately whether Online Trading is suitable for you.

• Language: English
• Publisher: Stefano Calicchio
• Release date: May 16, 2014
• ISBN: 9786050304589

Book preview

Keys

Preface

This manual was written by taking into account the great paradox that characterizes trading operations since the online financial intermediation was created.

The contents of this guide stand out the simple and free features that every individual can achieve when executing a market order in real time and thanks to all the trading platforms that can be found on the Internet.

Furthermore, by examining these issues, many complications and high entropy factors can appear in the dynamic and changing trading world every day.

Simplifying the basics of trading without being predictable has been a great challenge that we had to face during the writing process of this guide. Many more references about this subject will be often available because they represent one of the best strategies that keep alive all the concepts without interrupting the main information flow.

As a reader, you are simply asked to consider these guide assumptions and the subsequent knowledge you will be able to achieve in the following pages.

Introduction

"When the answer is simple,

God is answering"

Albert Einstein

Online trading has experienced an extraordinary growth in recent years. A gradual disintermediation of traditional jobs and trades, which occurred in Western countries since the early years of the new century, has coincided with a growing financialization of production sectors, raw materials, and consumer goods.

It may seem paradoxical, but today you can find financial derivatives whose underlying asset can be surprising, such as the climate or the weather forecasts: this mathematical model was developed by Norwegian Professor Fred Espen Benth, who opened the way for the listing of derivatives in the Chicago Exchange by using one of the above-mentioned assets.

This continuous process of evolution has transformed online trading into a crucial element for large institutions as well as for small investors, because financial markets have never been so fluid and varied as they are nowadays, thanks to new products and services.

Afterwards, globalization did the rest: everyone could begin to engage in an activity that until recent times was only a prerogative of institutional investors. Now, for example, it is possible to operate in the financial derivatives market with a broker who lives or works in another continent and uploads real-time information on websites and forums in any language all over the world.

These trends are confirmed by data derived from researches conducted by brokers with respect to their own market like the KMPMG in 2010. According to that, online traders in a country like Italy, for example, are more than 500,000 and most of them can execute 200 transactions approximately per month. This scenario, which is already enough to understand the extent of this phenomenon, does not include all the other countries of the World.

Now the evolution of financial markets and the economic growth are two concepts profoundly different and they have stopped being seen as one; this factor justifies and promotes the opportunity to work as an online trader or investor, as it can also be combined with a traditional