Online trading is no walk in the park, but it can be lucrative. To be successful at it, you’ll need to put in the work and hone certain skills.
How to improve your market analysis skills for online trading
The world of online trading can truly seem daunting. Markets, financial instruments, charts, currencies, shares, stocks, commodities, indices – it’s enough to make any novice think twice. However, it’s not a doom and gloom situation, not in the slightest. In fact, the highly lucrative world of online trading can serve you in more ways than one. Once you get into it, you’ll soon realise that trading isn’t just a hobby, a job or a side-hustle; it’s a way of life. It’s something into which you’ll have to immerse yourself if you’re going to be successful. It’s an exposure to a new world with new knowledge and a fraternity of like-minded individuals. However, if you’re going to take it seriously and do it right, then there are definitely a bunch of things that you can do to improve your market analysis skills within this highly complex, intricate and exciting field of finance.
Get a mentor
Quite often having someone show you the way can prove easier than finding it yourself. A good mentor in this industry will be a seasoned trader who’s actually managed to carve out a career for himself. While there is no silver bullet or holy grail in this industry, there are those who can guide, advise and help you to traverse the complexities of trading. Don’t be surprised if you have to pay for mentoring services, but keep in mind that it can certainly be worth your while.
Hone your maths and analytical skills
Online trading is something that anyone passionate about it can get into, however, you’ll be able to hit the ground running if your mathematical and analytical skills are on form. You must remember, you’ll be dealing with currency pairs and this can require some quick maths skills to keep up. In addition to this, the ability to analyse data quickly can only be of service to your trading aspirations. You’ll need to contend with technical charts, patterns and indicators, and to the novice, all this information can prove overwhelming. Thus an understanding of these concepts is of paramount importance if you’re to develop any kind of workable strategy.
A hunger for knowledge
One of the great things about entering the world of trading is the type of knowledge you’ll be exposed to, and it’s something that you should relish. Outside of all the analytical charts and patterns that you’ll get to examine, there’s also the world at large, which is largely responsible for the movements of currency pairs, commodities etc. This means that you’ll need to become more worldly in your knowledge, especially with regard to economic and political news. For instance, if you’re trading in a currency pair that involves the US dollar and there’s talk of war in the white house, you’ll need to implement such news into your trading strategy. How will it affect the value of the dollar?
Demo accounts and literature
A trading demo account remains a pretty effective way in which to gain a firm understanding of the basics. They usually come at no cost and most online brokers will also supply free demo credits.
CityIndex provides daily market updates and is more than happy to offer newcomers a demo account. You’ll be able to trade in a simulated environment, not unlike the real-time one. It’s a great way to get familiar and build some confidence before giving it a go for real. Some people have said that print is dead but books remain the bastions of real knowledge and the same can be said about the literature available on trading. An online search will quickly reveal absolute must-reads such as Currency Trading for Dummies by Kathleen Brooks, Trading in the Zone by Mark Douglas and Japanese Candlestick Charting Techniques by Steve Nison.