One of the biggest hang-ups that people have when it comes to trading is that there are so many barriers to entry. What people don’t know, though, is that many of these barriers are completely gone now. True, 10 or 15 years ago, it was tough to get started. Most people didn’t have the technology that they needed to make accurate predictions, and even fewer people had enough money to significantly avoid losing everything that they had. Today, thanks to advances in computers and cell phones, coupled with new methods of trading, it is actually quite easy to get started in this line of business. Here, we will show you some of the easier ways to make the transition from being an investor to becoming an active trader.
Let’s look at what the top barriers to entry have been in the past, and debunk them.
Take the Money
This has always been a huge concern, and for a good reason. People trade to make money, but in the past, if you didn’t have a huge amount, it was impossible to get started. To be a day trader in the stock market, you would need to create a margin account with a broker. Over the years, the minimum number of dollars that you needed to have in your margin account kept going up. Today, you can’t really effectively day trade unless you have tens of thousands of dollars more than the margin requirements. Really, you shouldn’t try day trading here unless you have at least $100,000 in an account. For most people, this is not realistic. Thanks to the spot Forex market and now the forex options market, though, you can day trade with far less, usually around $500. These reductions have practically erased the money excuse when it comes to not trading. Although margin and low broker deposits are available, it doesn’t mean the risk goes away. This actually increases risk on your trading account.
Build on Your Knowledge
Again, not having enough knowledge of the market is a good reason to not trade. If you don’t know what you’re doing, there’s a good chance that you will lose money. But information is more widely available now than ever before in history. There are tons of market analysis sites out there, apps that follow along with the news or market quotes, and even tutorial videos that can teach you exactly how to create a profitable strategy. If you want to learn how to trade, there are tons of resources for you, and most of them are free to access. Most sites allow you to demo trade, too. With this, you can trade on their actual platform for a limited time without any risk since you will be using fake money for your executions. This has been a huge asset to many new traders to the markets. You can learn a ton when it comes to a practice account.
And if you still don’t have full confidence in what you are doing, there are even trading robots out there that will execute your trades for you.
Use the Technology
The best traders in the world have cutting edge technology on their side. They have fast, powerful computers, multiple screens, and efficient software that make many of their decisions for them. The normal person couldn’t afford that much high tech stuff. Except now, most of us already do. The average computer now is much better and faster than the top computers from 15 years ago. Internet is faster and more reliable, and analysis and charting software is cheaper than ever before, if you can’t find a good program for free, that is. And when it comes to screens, you might make most of your trades from your computer, but many of us have smartphones and tablets that we use daily, too. Using these things in conjunction with one another gives you all of the advantages of a professional trader. Most brokers across all types of trading will even allow you to trade from a mobile device, if so desired. Most forex brokers will also have to adapt to the newer technology as it comes out. This is what makes the growth of any industry that much better.
Time is on Your Side
If it were up to us, there’d definitely be a few extra hours in our week so that we had more time for things. That’s not something that we can change, unfortunately, but to combat this, you can increase your efficiency. Even if you have a full time job that has nothing to do with finance, you can still find time to trade. Like mentioned above, technology has come a really long way. You can trade stocks, and Forex pairs from a smartphone or tablet while you’re on your lunch break at work. You can even set up automatic trades so that when prices hit a certain point, your broker will execute either an entry or exit trade on your behalf. It’s much like anything else that’s worthwhile in your life; if you value it enough, you will find time to make it happen.
None of these “barriers” are actually barriers to trading anymore. If you want to trade and have a few hundred dollars that you have set aside for this purpose, you can begin. With some experience and education, you can be very successful at this, too.