Trading and Investing: How to start doing it?
Trading is one of the most common ways to increase your equity. It involves trading stocks, currencies, futures, options and other financial instruments. The main point of this activity is to buy at a lower price and sell at a higher price. To be successful in trading you must have a sufficient amount of knowledge. This will help you avoid unwanted small mistakes and minimize the risks of losing money. It is important to understand the difference between trading and investing. Trading means short-term and medium-term speculation in the stock market, buying or selling stocks within a week or several months. In contrast, the investor forms a long-term portfolio on the stock exchange with the aim of keeping it for a year or more. A trader concludes agreement with a broker and starts trading.
Unfortunately, even with a high awareness of what trading is all about, many people start doing it expecting easy money. Beginners often rely only on luck and make rash decisions. You should immediately take into account that trading is not a casino, and a trader who has just entered the profession will have to put in a lot of effort and learn to overcome failures.
So what is needed for a trader to start? Firstly, basic knowledge of trading rules and algorithms. A beginner trader needs to learn how to detect patterns between the economic and political events that have a direct impact on the market. This is called fundamental analysis, which means the necessity to follow the world news and find direct connections between current events and changes in the market. For instance, depending on the economic indicators of the company (turnover, profitability, etc.), it is possible to determine the company’s overall prospects for growth.
Secondly, to get familiar with technical analysis methods, that are reflected in price movements and patterns found on analytical charts. There are many ways here, a novice trader should focus on one direction and bring it to perfection. To learn technical analysis, you need to look at thousands of price charts in all time frames. The main indicators for the health of a stock and prediction of future price in technical analysis methods is its past trading activity, movements and changes.
One of the technical analysis tools is MonInvAI focused on investment, that means the building of a long-term portfolio. It conducts mathematical analysis of the values of stocks and cryptocurrencies of companies, using neural networks, machine learning and several models in the process of predictions, and it regularly re-tests algorithms. That’s why in addition to basic information about opening price, closing price, volatility, volume and etc. of the chosen stock or cryptocurrency, you will be provided with indicators such as Power C and Power ML based on which you can make successful trading decisions.
Having learned the theoretical basis and saved up the required amount of money without borrowing it from a bank, friends or family, you should choose a broker and open a trading account. You need to start with small amounts of money, making several transactions to see how everything works. This will help you avoid big losses at the initial stage. It is also important to diversify your investments, that means not to invest in one asset, but in a set of them. This will reduce the risks. Practicing gradually you will learn more and more trading strategies and increase volumes of transaction little by little. Remember that everything in the world is changing, and so is the market! Therefore, we must be adaptable using classic tools and strategies, along with AI and technological innovations such as MonInvAI if we want to trade successfully!
