Make Money Online: Is Trading the Best Way?

Making Money Online: It's the dream of many. After all, work has lost its appeal nowadays. Not so much due to a hidden (when not corresponding to reality) lack of willingness to work, but rather due to the conditions of today's market, which leave little room for satisfaction. Now, the average internet user is subjected daily to advertising messages about trading, which promise or at least suggest the possibility of making money online, therefore from home, perhaps paving the way towards achieving financial reality. How much of this is true? Can trading really allow you to make money online and become rich? This is the question that beginners, or even those who, as absolute novices, look at trading as an opportunity to consider, ask themselves. Those who trade know the answer, which is nonetheless very complex. It certainly cannot be exhausted in a few lines. This article aims to offer a comprehensive answer for those who would like to start a career in trading with the goal of making money online.

Does Online Trading Make You Rich?

Potentially, online trading can be a tool to accumulate wealth. After all, there are rich online traders, in some cases very rich, so it's obvious that the possibility exists. This doesn't mean it's easy, or that this activity is within everyone's reach. It's a world that has its lights and shadows. For some, much more lights and shadows. It's not just a matter of context, but also of personality. We will address this topic in the next paragraphs. For now, let's list the reasons why yes, if your goal is to make money online, trading could be an alternative to consider. When it works, the returns are higher than any "classic" investment. If you've set aside a nest egg, or even a significant capital, and you've turned to a bank to invest this money, you've certainly been amazed at the meager returns. We're talking about a few percentage points per year, for low and medium risk products. In short, nothing that can lead to wealth, let alone financial freedom. For trading, it's different; after all, we're talking about speculative investment. When it works (it's worth repeating: when it works), the returns are potentially very high. They are certainly far superior to the few annual percentage points offered in the most classic and institutional settings. Another reason why trading could represent an alternative, if your goal is to make money online or, more specifically, to achieve financial freedom is the following: trading exalts the very concept of freedom, at least compared to practicing a profession, working in an office, etc. Indeed, there are no schedules, no bosses to answer to, no colleagues to deal with. The only limitations are represented by the rules imposed by the broker (which can be quite stringent) and by market dynamics. Actually, market dynamics represent the heart of the matter, and the main (sometimes insurmountable) obstacle that stands between the individual and wealth.

The Risks of Online Trading

The elements we introduced in the previous paragraph are real; they correspond to the truth. There is no doubt that online trading can yield more than a classic investment, and there is no doubt that trading activity allows a margin of discretion - especially from an organizational point of view - that is unmatched in the world of employed work and even in the entrepreneurial one. However, there is a flip side. And it's a flip side that counts a lot. Upon analyzing it, one might think that no, online trading is not the right way to make money online. It certainly isn't the easiest way. Here are the reasons. Winning traders are few. The statistics, although unofficial, are merciless. Only 15% of traders end the calendar year in profit. According to other sources, the percentage drops to 5, or even 2%. The substance doesn't change: the bottleneck is monstrous, and consequently, overcoming it is quite difficult. The market is very complex. Exactly. Everything, or almost everything, is determined by the complexity of the market, which has its rules, its dynamics, but can also be incredibly unpredictable. Market players are numerous and varied. This is not an aspect to be overlooked. The market is populated not only by retail traders but also by companies, private entities, commercial banks, and even institutions. In some cases, the objectives are different (e.g., multinationals participate to protect themselves from exchange rate risk). In any case, many of these players have more information and resources than the small and defenseless retail trader, so they can have a dramatic impact on the market. If you are unable to sense the undercurrents and what's behind them, you suffer these dynamics rather than ride them. Trading is a very stressful activity. The stakes are always high. Therefore, the physiological pressure is enormous, bordering on unsustainable (there are, however, techniques to neutralize it). Some trading tools are very dangerous. Of course, the important thing is not to use them, but in any case, the temptation is strong. The reference is particularly to excessively high financial leverage, real capital multipliers, which exponentially increase potential gains but also potential losses.

Making Money Online: When Online Trading is a Wise Choice

The issue is controversial. Some elements make one think of trading as a tool for making money online, while other elements suggest the opposite. So, what to do? It depends on your personality, that is, on your personal ability to minimize the risks we have just described. For example, coolness and stress resistance are fundamental qualities because they allow you to reduce psychological pressures. Similarly, it is important to have the ability to keep your feet on the ground, to not get discouraged when things go wrong, and to not get excited when they go well. In general, emotions in trading represent a negative force, capable of causing certain troubles. Certainly, the desire to learn and a certain aptitude for study must not be lacking. Also because, in truth, as arduous and all-consuming as the pre-trading training path may be, one should continue to study and update oneself even afterward. Trading, as granitic and immutable as it may appear, is a world that changes and evolves in its own way. So, if you want to make money online, take a look inside yourself. Do you have the right personality? If so, give it a try. If not, don't give up on your dream anyway. Luckily, with a bit of commitment, it is possible to develop the personal skills necessary to increase your chances of success.