Getting started on the right foot is difficult if your goal is to practice online trading. We're talking about an activity that can be very rewarding, it's true, but also very complex. In fact, it's often more complex than it might seem, and certainly much more so than how it's portrayed by some daring advertising campaigns (by Brokers, of course).
Therefore, a certain awareness of the basic, essential elements is necessary to increase the chances of success. Such awareness takes on obvious importance, especially if the trader, rather than a professional, is an aspiring one.
We'll discuss this in this article, starting with an overview of the difficulties that beginners must face, and concluding with an examination of the
elements that must not be missing in the early stages of online trading.
The entry barriers to online trading
Yes indeed, like any activity that is both autonomous and complex, online trading also has its entry barriers. This contradicts part of the collective imagination, which speaks of online trading that is accessible to everyone, always and at any time. The truth, unfortunately, is more bitter than it seems. So, here's a reflection on the
entry barriers that beginner traders must overcome.
Psychological barriers
It may seem strange, but opening the first position is always a small trauma. It's about breaking the ice, of course, but also about overcoming a psychological handicap that is absolutely natural, justified, and inevitable. We're talking about the fear of losing money, which - it must be said - doesn't abandon even experienced traders, but which is particularly limiting for a beginner.
Moreover, psychological barriers can also arise after the first trade, and can impact investment activity without the trader realizing it. We're talking about all those
psychological dynamics that almost immediately come into play, but which jeopardize capital. The tendency to consider trading as gambling, and the trade as a tool for redemption from a loss, are just some of them.
Technical barriers
They are probably the most obvious barriers that a trader must overcome, those that they themselves feel most strongly. After all,
the market is governed by complex dynamics, which require the possession of a considerable set of skills. Not to mention the knowledge needed to make a platform work, to exploit it properly, to get it up and running (especially as far as analysis tools are concerned).
Technical barriers can literally block the beginner trader. Fortunately, they are also the simplest to overcome or, at least, those whose overcoming process is characterized by a lower degree of uncertainty. After all... just study.
Financial barriers
Finally, the financial barriers. It's obvious,
without capital you're not going anywhere. The issue, however, is more complex than it might seem, and should be viewed from two perspectives. First of all, it is necessary to distinguish between entry barriers in the strict sense and obstacles that stand between the trader and profit.
In the first case, the problem does not arise... or almost. After all, many brokers offer the possibility to start trading by putting in a capital (initial minimum deposit) of just a few hundred euros. We're therefore talking about figures that are within everyone's reach.
In the second case, the matter becomes more complicated. Trading is one thing, trading to generate substantial profits is another. It is evident that investing negligible amounts will lead, at best, to equally negligible profits. Unless you generate profits equal to 100-200% of what you invested, but we are in the realm of utopias, at least as far as the initial phases are concerned.
This dynamic, quite physiological to tell the truth, requires starting with substantial capital, not necessarily high but still able to significantly restrict the audience of aspiring traders.
The 3 ingredients for getting started on the right foot
In light of this analysis of entry barriers, what are the three ingredients for a good start? What are the elements to leverage to overcome the aforementioned barriers? Well, they are "less strange" elements than you might imagine. Indeed, they are quite recurring in discussions regarding online trading, especially from the beginner's point of view.
Theoretical training
It is simply unrealistic to think of doing online trading
without having completed a training course worthy of the name. Many start trading in the absence of sufficient, or even mediocre, knowledge. Well, these people are destined to lose their capital in a rather short time. Also because, it is worth reiterating, online trading has nothing to do with gambling.
Now, training is both simple and difficult at the same time. It's simple because the web is full of interesting and useful educational content. Knowledge is almost at your fingertips. And for the same reason it is difficult: disentangling yourself in this babel of stimuli and content can be complicated.
Therefore, the advice is to follow, at least in the first part of your training path, a path already traced, which can be organized by a prominent trainer, a mentor you know personally or, why not, a broker who is particularly attentive to the topic of education.
Practice
Theoretical training is important, indeed fundamental, but alone it is not enough. For all intents and purposes, it represents only the first step. The next one is
practice. Now, to practice since the world began, it is necessary to operate in reality, with all that this entails in terms of personal risk. After all, doesn't someone preparing for their driving test drive on real roads?
Fortunately, online trading offers an alternative. Specifically, it allows you to simulate operations through a
demo account. For all intents and purposes, you operate in the real market, but without spending real money. In fact, the money is completely fake. A good way, indeed the only way, to cut your teeth... without breaking them.
Assistance
The last pillar of any "good start" is the support of the Broker. The Broker is more than just an intermediary, it is the reality that somehow designs the environment within which the trader operates. Therefore, it can put the trader in a position to earn, or it can hinder them (certainly unintentionally).
The advice, therefore, is to choose only quality brokers that offer a good assistance service. Which, needless to say, is especially useful for beginners, for those who have yet to acquire full mastery not only of market dynamics, but also of platform dynamics.
