Online Trading and Economic Crisis: Temptation to Avoid or Solution to Pursue?
April 1, 2021
Can Online Trading Be a Solution to the Economic Crisis? Many people are asking this question, especially those who are suffering from the current economic crisis, who may have lost a job, or have simply seen their income decrease enormously. Critics of online trading tend to reduce this activity to the rank of a scam, or little more.
But is it really so? Is trading just a temptation that should be avoided? Let's clear up the main doubt: online trading is not a scam, at least not if you take it seriously. In fact, it is a practice that enjoys its own dignity. From here to making it a resource to get out of the economic crisis, however, there is a long way to go.
Let's address the topic in this article, trying to provide sufficient elements so that everyone, from absolute laymen of investments to those who know a bit about it, can form an idea.
The Numbers of Online Trading
Before considering the opportunity to view online trading as a solution to the economic crisis, it is good to have an overview of this activity. There are two elements to note, which are in stark contrast to each other.
The first consists of the terrible reputation that online trading enjoys in the collective imagination. Those who know nothing about online trading tend to consider it as a scam or at least an activity linked to gambling. Well, the risk is there, it exists and is inalienable. However, online trading has nothing to do with gambling, unless the trader intends it that way and behaves accordingly. Probably, this prejudice was born from the experience of those who approached online trading in a reckless way, as well as from the prominence of some bad apples who did harm to their users and good for their own wallet, perhaps committing crimes.
The second element consists of the increasingly widespread diffusion of online trading among ordinary people. The market has seen the entry of new traders in recent years, and at an extraordinary rate. Among other things, entry rates tend to increase precisely at the same time as economic crises rage, almost as if speculative investment activity can represent a solution. It is therefore worth analyzing online trading from this point of view.
Why Online Trading Is Not a Solution
The best way to understand if online trading can represent a way out of one's economic difficulties is to explore both theses, that is, the one according to which online trading is a solution and the one according to which online trading is not a solution. Let's start with the latter.
Capital is needed. After all, online trading is a slightly more speculative version of classic investing. Therefore, capital is also needed in this case. Actually, some brokers offer the possibility to start with a few hundred euros. And in fact it is a great opportunity. However, it is above all to cushion the impact with the market, which is a really competitive place. To make money, sooner or later, you need money. This, obviously, places it against the thesis of "trading as a solution", also because those who are suffering from the crisis often have little money set aside.
You can't improvise as a trader. One can discuss whether online trading is a solution or not. However, there is one fixed point: it is not a quick solution. In fact, you can't improvise as a trader. Many malicious brokers (fortunately only a very small minority) aim to spread this perception, but it is a false perception, a hook cast to catch unaware people. Obviously, the need to learn to trade, before starting to invest, excludes from the dispute all those who need a quick solution to get out of their personal economic crisis.
You risk going from the frying pan to the fire. Online trading is certainly not a solution for those who have dived in headfirst, without having gained the right consequences. In this case, on the contrary, it is even counterproductive, and could even worsen the economic situation. In fact, another fixed point of online trading is that, from whatever perspective you look at it, it is still an activity that presupposes a certain degree of risk.
Why Online Trading Can Be a Solution
After having played the devil's advocate, it is good to identify three elements for which yes, online trading can be considered a solution to get out of the economic crisis.
Online trading is a noble activity. Online trading is nothing more than speculative investing practiced on the internet, by means of specific platforms and with the help of a broker. As such, it is an activity that has its own dignity, its own doctrine, certainly its own degree of risk but also its own degree of potential profitability. From this perspective, there is no reason why online trading should be considered differently from any other self-employment activity, which in any case involves the investment of capital. And, it should be noted, starting your own business is by definition a solution to get out of your economic difficulties.
Many have made it. Regardless of the many risks that trading activity poses, there are still many who have made it. Those who, perhaps starting from a position of total unawareness of the mechanisms, have put themselves under, have studied, have started trading and have achieved success. Therefore, although the odds are not necessarily significant, "breaking through" in online trading... It can be done.
Educational materials abound. Today more than in the past, the absolute layman can become an expert trader, or at least "competent enough" to embark on a career in trading. In fact, educational materials abound. Moreover, they are often ordered, almost to develop a linear learning path. Many organizations and companies offer trader training, but also many brokers, eager to convert - in a natural and effective way - ordinary people into "stable" investors, who operate on an ongoing basis. It is also in their interest to reduce the dropout rate.
A Conclusion
So, how to answer the question that inspired this little reflection? Actually, a univocal answer cannot be given. For some, online trading can be a solution, that is for those who want to get involved and study, and perhaps have available capital to start with. For others, probably a good portion, online trading is not a solution. For still others, it is just a risk.
Everything lies, therefore, in the approach of the aspiring trader. Perhaps the only real answer is this: online trading can be considered as a tool. Therefore, the opportunities depend on how it is used.
