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2016 was a turbulent year. A shock EU referendum result, U.S. election campaign, and political unrest in the Middle East, combined with the death of a large number of much-loved celebrities, caused ructions in the stock markets round the world. As a result, you might be forgiven for thinking that online trading is too volatile to contemplate. But you would be wrong!
Stocks and shares outperform savings accounts and bonds every time. If you deposit your savings in an ISA, you would be lucky to achieve 1.5% interest right now. It’s a different story in the stock markets, and although there is a lot of uncertainty with Brexit on the horizon and a Trump presidency, the FTSE 100 ended the year up by 14.4%.
Since you can’t hope to make any money via traditional methods, the best way to maximise your savings pot is to have a go at online trading with a reputable company such as ETX. To give you a helping hand, here are three tips for beginners.
1. Understand the Basics
There is a lot to learn when you start online trading. For example, you can invest in stocks and shares, speculate on the Forex market, buy gold or silver, or bet on the performance of Exchange Traded Funds (ETFs). There are many different options, so read up on the different types of online trading and familiarise yourself with the jargon.
2. Have a Trading Plan
2017 is likely to be just as volatile as 2016. Theresa May has spelled out the way forward for Brexit, but leaving the EU is going to be a long and difficult process. Since political uncertainty always causes jitters in the market, it is wise to have a trading plan. Decide how high your tolerance to risk is and never invest money you can’t afford to lose.
3. Practice on a Dummy Account
It takes time and experience before the majority of people start to make a decent return from their online trading account. To begin with, try trading with a practice account, so you can see how the markets work. Create a dummy portfolio and monitor your ‘investments’ closely. Once you feel comfortable with the process, start creating a real portfolio.
Even seasoned investors get it wrong, so don’t be surprised if you lose money on your early investments. You should also remember to factor in the fees and initial charges on funds, as these will eat into any returns you do make.
