How I generate a side income from home

Trading Blog | 5 min read 

How I generate a passive side income from home

This guide breaks down exactly how I make an extra £500 passive income per day from the comfort of my own home. If you want to make money online, this guide is for you.

Written by Starttrading.com

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One of the best things about living in the 21st century is that there are now plenty of opportunities for making money online from the own comfort of your home.  Although everyone’s circumstances are different, something as simple as having access to the internet can provide you with extra income… now who wouldn’t want that?

Let’s cut to the chase. You’re here because you want to learn how to make money online.

If you’re looking for legitimate ways to make some extra money online without having to first purchase an in-depth training course, then you’re in the right place!

This is my ultimate guide on how to make a side income online, and it’s completely free.

There’s no catch, no tricks, and no credit card details required.

I’m sharing everything I’ve learned over the past decade, pulling from my own experience in consistently earning over £10,000/ month in side-income (on the side of my day job) from the comfort of my own home. You just need a laptop, some start-up capital (even less then £100 is fine) and an internet connection to get started.

Like me, you’ve likely searched up various ways to make money online and by now you probably already know… one of the best ways you can start making money online right now is by investing or trading the financial markets. Don’t worry, the secret I’m about to share with you isn’t another complicated trading strategy or some type of get rich quick scheme. Instead, it is a way for a normal individual such as yourself to earn money by simply copying the expertise and skillset of professionals that do this for a living. The best part is… it’s all FREE!

Sound too good to be true? Trust me it’s not, people are benefiting from this every single day and throughout this guide, I’m going to show you exactly how it works.

Firstly, what is trading?

Everybody is familiar with the term “trading”. Most of us have traded in our everyday life, although we may not even know that we have done so. Essentially, everything you buy in a store is trading money for the goods you want.

The term “trading” simply means “exchanging one item for another”. We usually understand this to be the exchanging of goods for money or in other words, simply buying something.

When we talk about trading in the financial markets, it is the same principle. Think about someone who trades shares in the stock market. What they are actually doing is buying shares (or a small part) of a company. If the value of those shares’ increases, then they make money by selling them again at a higher price. This is trading. You buy something for one price and sell it again for another — hopefully at a higher price, thus making a profit and vice versa.

However, what differs trading from simply investing, is the ability to “Sell”, also known as a “Short” position. Making money when a share decreases in value.

What is copy-trading?

Copy-trading is the most simple, efficient & transparent way to make money from trading the financial markets for someone who has limited knowledge when it comes to investing.

Copy-trading is a form of investing that allows investors to observe the trading behaviour of their peers and expert traders and to follow their investment strategies using auto copy trading activities. The World Economic Forum report has even called it a low-cost and sophisticated alternative to traditional wealth management.

Copy-trading allows ordinary people with little to no experience copy trades executed by winning investors/ traders in the financial markets. Instead of spending countless hours with your trading mentor learning how to trade, you can benefit by getting access to the exact trades they are placing on a daily basis. Generating you income from the profits in the process.

  • Copy-trading frees up time for both new and experienced traders. Even investors with tight job schedules can earn in the markets without having to monitor their trading charts all day.
  • Copy-trading allows traders to choose the trading style that suits their risk tolerance and trading preferences.
  • Copy-trading allows for the diversification of risk. That is, you can trade manually by yourself, plus you can boost your market insight by integrating copy trading into your trading activities. Even while copy trading, you can select different signal providers in order to hedge trading risks in case different trading strategies become successful in different market conditions.

From my own personal experience both learning how to trade as a beginner and by mentoring students on how to trade using my strategy. Learning to trade on your own is not easy… Risk management, physiology, strategies, emotions and patience are all essential aspects in becoming a profitable and consistent trader.

Using the auto-copy feature you could copy all the transactions, including trade-entry, take-profit and stop-loss. Allowing you to rest easy whilst the pros do what they do best.

How I came across copy trading

I first came across copy trading almost 5 years ago, whilst in the process of learning to trade. Obviously, when learning to trade I didn’t have a successful trading strategy in place. Which meant that choosing people who had these strategies in place was important for me.

Not only was I able to analyse and learn their techniques for future reference but also to ensure that I was following winning traders and that their trades have a high probability of being profitable. I achieved this by doing research on the potential traders I considered copying. The good thing is that transparent trading results are available, and the leader board shows live results of traders’ performances from all over the world. I like to look into a trader’s detailed trading history before choosing to duplicate their performances.  This gave me a picture of how successful the professional is so I could minimise risk as much as possible and filter my choices to traders who had a strategy I liked or takes the same risks as I would.

What are the benefits of copy trading?

My experience with copying trading has been shocking in the most positive way possible, where I am still gobsmacked at how easy it has been to make profits whilst I get on which my day.  At first, I was sceptical at how money could be made so easily, but what I love is that I am in complete control of my account where I can choose which traders I copy trades and most importantly decide how much risk I want to copy traders with. At any point, I am able to adjust the settings to my account; stopping copy trading, withdrawing or putting on my own trades. It honestly couldn’t be any easier!

You may have heard that the world of trading is becoming more and more accessible. The variety of tools and platforms is shockingly big and diversified. The latest industry trend is social trading as it allows to benefit from the features of a traditional social media combined with the tools for trading and investing. Novice traders can benefit from copying professional traders’ live trades and strategies.

Copy-trading can be useful for traders who don’t have the time to follow the markets themselves. Generally, copy trading is focused on short-term trading, but there are several different strategies that are used to generate revenue. The assets that are used focus on the foreign exchange market and contracts for difference. While copy trading can be lucrative, there are also risks involved, and traders should remember that past results are not a guarantee of future returns.

Copy-trading allows traders to diversify their portfolio. This means that a trader is using multiple ways to make money in the markets. Instead of putting all their eggs in one basket, traders can use multiple strategies. When copy trading, you should consider using a few different traders to copy.

One way to diversify is to find copy traders that trade on different financial instruments. For example, you could copy a forex trader as well as a commodity trader. They could also consider copying traders that use different time frames. One might be an intraday trader and another could be a longer-term trader. Traders that experience high volatility on their returns compared to those that have low volatility on their returns could also be considered. Lastly, one may consider very active traders compared to less active traders. Remember, however, that if something appears too good to be true, it probably is.

What are the risks of copy trading?

The greatest risk you will face when copy trading is copying an unsuccessful trader. If the trader you follow is unsuccessful, they can lose money and you will too. However, this risk is minimised due to the transparency of the leader board, stats and trader profile aspect of the platform.

One way to minimise this risk is to follow the strategy of more than just one trader

While it is possible to have gains by copying only one trader, it is better to diversify your portfolio. Basically, by copying more traders, you are lowering your risk. Remember: even the best traders have bad days, weeks or even months and they can also lose, so diversification is the key to minimizing your loss. It is much less likely for 2 or 3 successful traders to have an unsuccessful trade.

It’s also a great strategy to never hesitate to stop. The best strategy is not to let the traders you copy reach 30% and more loss on the overall amount invested. So, if you see that things don’t feel right — just pull the plug and stop auto-copying the losing trades.

Finding the best traders to copy

First off click on ‘Top Traders’ on the NAGA sidebar.

You can either simply scroll down the page to see promising and trending popular investors…

Past performance is not an indication of future results. Trading history presented is less than 5 complete years and may not suffice as basis for investment decision. This is not investment advice.

…or you can use the advanced search feature. You can change the criteria to match what best suits you such as:

  • Most trades made
  • ROI on single trade
  • Best return
  • Most copiers 
  • Profit for copiers
  • & much more…

Viewing a trader’s past performance

I’ll now walk you through assessing an individual trader before outlining the exact steps to copy a trader, so you can understand what to look for and how the process works.

By clicking on the ‘stats’ tab in a trader’s profile you can access some very useful information to help determine whether they are worth copying or not.

There are two other key things to look at here. The profit chart indicates how much a trader has made and the win rate shows how often the traders win their trades. For this example, the trade has won 14,392 trades and lost 89. (you can’t win every trade…)

How to copy a trader

Copying itself is simple. Once you’ve found a trader who you feel is reliable, simply open their profile and click on the blue ‘Copy’ button.

You’ll then be prompted to enter an amount with which to copy that trader, and you’ll see some useful information appears.

At the top of this screen you will see two options:

  • Copy by position
  • Copy bt investment

Copying a trader by position is a percentage allocation of your account size for every trade made. Let’s say you auto-copy a trader with 10% and you have an account size of £100. This would mean that you would invest £10 into every trade they make, profiting on your £10 whenever they profit on a trade. 

Copying a trader by investment is a fixed figure you will enter for every trade made. Let’s say you auto-copy a trader with £100, this would mean that you would invest £100 into every trade they make, profiting on your £100 whenever they profit on a trade. 

You can also set a “stop-loss”, which is a means of protecting against heavy losses, set at 40% by default. If the person you are copying loses 40% of your investment, your account automatically stops copying them. You can set this level to whatever you want, depending on how much risk you’re prepared to take. Personally I keep the number closer to 25%.

How to start copy-trading

Step 1

Open a NAGA trading account 

You need to open a trading account in order to start trading. The application process is simple and secure and you can apply for an online account at any time by filling in the online application form.

Once you have successfully completed the verification process, you will receive a confirmation email to confirm that your account is open.

You may receive a call from an account manager, in case you have any additional questions.

Step 2

Verify and fund your trading account

Once your account is open, you’ll need to deposit funds into it to start copy-trading. You can do this in a variety of ways via the ‘Account’ tab in the trading platform

Your initial deposit must be at least $1.

For more information on how you can transfer funds in and out of your account, visit NAGA

Step 3

Find winning traders and start copy-trading

Now you have an online trading account and have deposited funds, you can utilize all of NAGAs innovate features to start trading. The social trading tool that takes your trading experience to another level. Beginner traders can benefit from automatically copying the professional traders live trades and strategies.

You can access live price feeds, streaming charts and news instantly and trade 24-hours a day. Good luck and safe trading.

How To Start Trading With £1000

Trading Blog | 5 min read 

How To Start Trading trading With £1000

This guide provides a detailed overview of how to start trading with minimal investment and make profits on your trading account.

Written by Starttrading.com

 

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trade cryptocurrencies

Trading can be immensely rewarding, providing professional satisfaction and financial independence to those who take the time to do it right. Even with just £1000, successful trading can very much be possible, as there are many traders out there who started with low capital amounts and turned that initial investment into a profitable trading career.

What kind of investor are you?

When you start trading, it is important to establish quite early on what type of investor you are. Identifying this type will help you know the consequences of your investment style, learning your own personal imitations and advantages that naturally result from the way you invest. Your trading method needs to be something you prefer and suits your lifestyle best, considering your
finances, available time and risk factor.

For example, active investors work hard to acquire and save money, but spend less energy making their money work for them. They understand that the wealth-building game is about return on capital, which is why they are willing to spend that extra time.

Choose your market

There are so many different markets for you to choose from, so it is important to establish what you are going to focus on and what different markets you can keep tabs on at any one time. Some traders would prefer to trade a single product and some will benefit from trading many, so this balance needs to be established from the offset and is dependent on the trader and their
strategy. 

One of the markets we recommend to start with is the Forex market, which is the largest market in the world and facilitates the exchange of one currency for another currency. Trading volume in the Forex market is generally very large because of the number of people who participate in it around the world. You essentially buy or sell currencies with the aim of making a profit from the changes in their value. Due to its huge popularity, the Forex market attracts many UK traders, both beginners and experienced traders alike.

Start trading on your own

As much as it may be nerve-wracking, the only way to improve your trading skills is to practice. No matter whether you decide to trade in the Forex, stocks or cryptocurrency markets, learn as much as you can about how these markets work. Education is key, so it is vital to gather as much information at an early stage as mistakes, later on, can be very costly and demotivating. Here at starttrading.com, we often recommend starting with a demo account. This will allow you as a trader, to start practicing when placing trades and executing your trading strategies without the risk of losing real money.

How can starttrading.com help?

As a business, we are very knowledgeable in many aspects of online trading, with our team having a combined trading experience of over 15 years. We have quickly become one of the UK’s leading and fastest-growing trading schools – with a worldwide student base. If you would like some advice when starting to trade with £1000, please get in touch with one of
our trading mentors today who will help guide you through the processes. We provide services which can both teach and guide you into the right direction of a bright financial future in the stock market.

Start trading the right way

At starttrading.com, our goal is to empower you to become a more successful trader and unlock financial freedom. We provide you with the information and educational content needed to learn how to trade.

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Why Do Most New Traders Fail?

Why do most new traders fail? How to be a successful trader

Most new traders fail to make money when trading. It is essential to know what these traders are doing wrong in order to avoid the same mistakes

In this article, we will discuss various reasons why 90% of new traders lose 90% of their trading account in the first 90 days. 

by Starttrading.com

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Trading privately is probably one of the biggest ways to make money from the comfort of your home. The internet is flooded with tips and tricks on how to be profitable while trading, indicators and techniques to follow and even signals on when to buy or sell. Then why do so many traders still not “make it”?

Trading without a plan

Whether you are a stock, forex or cryptocurrency trader, a consistent trading plan is of key importance to be successful. There is a saying that goes: “Failing to plan is planning to fail”. One will find that the top traders in any market never enter a trade without having it all planned out. This plan includes Risk reward ratios, possible ROI’s, escapes etc. and incorporates almost any
situation possible and how to react to it. Having a consistent trading plan will help you as a trader reacts to any situation the market throws your way as well as let you improve on your mistakes when the plan fails. It also acts as a method to keep you from making impulsive decisions which then depends completely on luck. If one does not follow a trading plan one may encounter the following problems:

  •  Slow or no growth
  • Continuously making the same mistakes
  •  “Luck” trading/ Impulsive trading

Setting up a trading plan may sound unnecessary to a beginner and be too much effort, but let us assure you, if you take this first step, you will quickly see its benefits and not be disappointed in the long run. To know more on how to create your own trading plan/strategy, visit us on www.starttrading.com

Connecting emotions to trading

As weird as this sounds, this is a massive problem in why most traders fail. A majority of traders, most usually beginners, makes the mistake of attaching emotions to the results of their trades. Trading should not influence one’s emotions at all. The thing is, the moment you attach emotions to a trade, your mind immediately gets distracted in one way or another. Having emotions influencing your thoughts will lead to less focus and you may then deviate from your plan. Most people do not realise that attaching your emotions to a trade is almost always non-beneficial in either way. Let us look at some examples, speaking from experience: 

  • If you lose a trade, you will immediately be disappointed and try to “fix “the loss. This then leads to you completely rushing a trade, putting more money on the line than usual, deviating completely from your trading plan and depending completely on luck. This is basically then gambling. Let us assure you, that most of the time this does not work out in your favour and even if it does, you have learnt nothing by it and will just be more emotional on the next trade. 
  • If you win a trade, you will immediately be very excited, although there is nothing wrong with this and it is completely normal to be happy when a plan works out, this is not good for trading. This usually leads to you feeling overconfidence and entering more trades. These trades are usually not thought through as well and deviate from your plan or can even be in the wrong market conditions. 

We can go on and discuss a lot more examples of how attaching emotions to your trades is non-beneficial, but we cannot hold you up the whole day. The point is, DO NOT attach emotions to your trading! If you ask advice by any professional trader, you will find that they will almost always refer back to this statement.

Having Unrealistic Expectations

Due to social media being flooded with traders, the luxurious life of some of these traders is not a secret anymore. The problem comes in when beginner trades see the lifestyle of some of these traders and expect to achieve this through trading alone and/ore in a very short time. They may also get the idea that trading is very easy and will make you rich very quickly. I am sorry to inform you that although this is possible, this is not the case for most traders. 

The unrealistic expectations traders have about trading is quickly smashed as they enter the trading ecosystem. This in turns demotivates these traders as reality hits them and they eventually quit. It is important to remember nothing in life comes without hard work and effort. There is also no quick way to make money and trading definitely supports both these statements.

“Bad” trading practice

When we speak about bad trading practice, it includes all the “mistakes” traders make that eventually leads to them failing in the market. One will find that most of these mistakes can be avoided by keeping in mind the first topic we spoke about, A trading plan, as all of these sectors form part of this plan and is necessary for its success.

Risk vs reward

It is safe to say that risk management is one of the most, “looked over” activities when it comes to trading. Risk management is the process by which one sets up the risk you are willing to take against the reward therefore, such as take profit and stop loss regions. If you as a trader does not have risk/reward ratios incorporated into your trading plan, it will be very difficult to not only know when to take profits and/or set stop losses but also to minimize your risk by managing it correctly. Risk/reward ratios are highly recommended and can have a big influence on long term success. Having no risk/reward regions in trading can lead to some trades being held longer than needs to and eventually loses the trader money. Continuously repeating this process leads to traders failing in the markets. 

High leverage

High leverage trading is another activity which leads to a lot of traders losing a lot of money and eventually quit trading. The fact that you can make large amounts of profits on small initial investments usually sounds like a great deal, but if these trades do not go your way, you could easily lose massive amounts of money and even get liquidated. It is very tempting to know that you can make much more profits than you currently are on trades, but it is strongly advised to not trade with leverage if you are not an experienced trader. Do not fall into the trap of thinking you will make money faster this way.

Overtrading

Overtrading is a very common problem where a trader places too much trades, usually unplanned, in a short time period. This can be due to many reasons such as a trader trying to make up money that was lost by previous trades, a trader seeing multiple potential trades at the same time and does not want to “miss out” or even a trader which cannot wait for a “good” trade and tries to enter every move. When overtrading, one usually does not set up a trading plan as there is “no time”, or even if one does, it is very short term and not well calculated. Overtrading to make up losses is never advised as this just again shows that one either attaches emotion to their results or that one does not have the patience and or experience to wait for the right time.

Other

There is obviously a lot more reasons why traders fail, but if you focus on not making the mistakes discussed in this article, you are already ahead of the game.

Conclusion

Now that you have been through this article, we hope you as a trader now know which mistakes not to make to stay profitable in the markets. It is important to always keep a clear mind and not attach emotions to your trades and critical to have a trading plan. We wish you all the best in the markets and hope you can take something valuable from this article with you throughout your trading career. For more information or consultations, find us on www.starttrading.com

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Slack went public, but through a direct listing, not an IPO

Trading Blog | 5 min read 

Slack went public, but through a direct listing, not an IPO

Workplace messaging service Slack became the latest hot technology company to sell its shares to the public on Thursday, soaring 50% higher than expected on its debut.

Written by Starttrading.com

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The San Francisco-based company’s shares started trading on the New York stock exchange at $38.50 – well above the $26 guide price – and closed at $38.62 valuing the company at over $24bn, making a billionaire of co-founder Stewart Butterfield and potentially ushering in a new era of stock market sales.

Slack sold its shares in a direct listing – eschewing the traditional initial public offering route. A direct listing dumps the costly underwriters, who do the preliminary sales work and establish an initial price, and the investor roadshow and instead takes the company’s shares directly to the market.

While the method saves on banking fees it can also lead to greater volatility in the share price. Only one other big company, the music streaming service Spotify, has gone public this way. That share sale is seen as a success and if Slack’s sale goes well too it will encourage others to follow suit.

Slack started life as a messaging app in a game created by Butterfield and others. When the game didn’t take off Butterfield spotted potential in the messaging app. Reborn as Slack the company attracted the attention of top-tier Silicon Valley investors raising $1.4bn from companies including Andreessen Horowitz, an early investor in Facebook, Twitter, Lyft and others.

Like most of its peers, Slack is losing money – it lost $138.9m last year and according to the company losses will “significantly increase” over the next few years. Revenues are growing fast up to $400m from $100m three years ago, but growth is slowing as the company gets larger and rival services from Microsoft and Google could eat into its business.

Shares of work messaging platform Slack didn’t slack off Thursday after they started trading under the ticker “WORK.”

The San Francisco company’s shares debuted on the New York Stock Exchange at $38.50 and rose slightly to close at $38.62.

Slack’s initial public offering is using an unusual approach known as a direct listing. In such cases, a company doesn’t hire underwriters or sell new shares to raise money; it simply lists existing shares. While there is no set price for the listing, Slack said in a regulatory filing that the volume-weighted average price of shares that changed hands in the private market from February through May was $26.38.

Slack aims to replace traditional work communication like email with its own messaging platform. Users start “channels,” or a group chat with a specific topic, rather than starting an email string about a subject. Slack says 600,000 organizations in more than 150 countries use Slack. That includes more than 10 million daily active users, who collectively spend more than 50 million hours in active use of Slack in a typical week, on either a free or paid subscription plan, according to the company. By contrast, Facebook has more than 2 billion users.

Slack’s listing is the latest in several highly anticipated tech IPOs. Rideshare companies Uber and Lyft, video conferencing company Zoom Video Communications and digital scrapbooking site Pinterest have all gone public in recent weeks.

They haven’t all been successes. Uber’s IPO in May was the most highly anticipated debut, but it hit a few potholes on opening day, closing down 8%.

Kathleen Smith, principal at Renaissance Capital, which researches IPOs, said a direct listing saves the company underwriting fees, but it means they have to have a strong investor relations program since initial shares aren’t being sold at a discount to attract buyers.

“It’s always a little challenging to get this kind of value into the market elegantly, we know it was challenging for Uber,” she said. “These very large IPOs can have a rocky road when they enter the market.”

Slack said earlier in June that for the February-April quarter, the company lost 26 cents per share as revenue jumped 67% to $134.8 million.

For the fiscal year ending in Jan. 31, 2020, it expects revenue to grow 47% to 50% year-over-year, totaling $590 million to $600 million.

Slack is the second major tech company to start trading with a direct listing after Spotify went public in April 2018. More than a year later, Spotify’s shares are trading at $147, about the same price at which it debuted.

Start trading the right way

At starttrading.com, our goal is to empower you to become a more successful trader and unlock financial freedom. We provide you with the information and educational content needed to learn how to trade.

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Airbnb IPO – Things for investors to know

Trading Blog | 5 min read 

Airbnb IPO - Top things for investors to know

An Airbnb IPO is in the works, here’s what to expect from the world’s biggest people-to-people accommodation marketplace going public.

Written by Starttrading.com

 

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What is Airbnb?

Founded in 2008, Airbnb is the world’s most popular travel accommodation marketplace, empowering millions of people all over the world to monetise and unlock their homes, allowing them to become hospitality entrepreneurs in the process. The company’s people-to-people platform delivers benefits to all its members, including guests, hosts, communities and employees.
 

Why is Airbnb going public?

Good question! The majority of companies go public with the aim of raising capital. With Airbnb it seems that it needs neither the immediate funds nor the reputation boost, so why is it thinking about an IPO?

Airbnb profits are stable. Even though it is a private company, and we don’t have exact financial metrics, TechCrunch reports that the company earned more than $1 billion in revenue in Q3 2018. Furthermore, Wall Street analysts predict that Airbnb’s revenue will continue its steady growth from $3.8 billion in 2018 to $8.5 billion in 2022.

Commenting about the Airbnb’s IPO plans, Mr. Blecharczyk added: “We have not decided if we will go public in 2019, and our focus is on building a 21st-century company, and we’re all committed to that goal”.

 

Airbnb fast facts

0 M+
Airbnb listings worldwide
0 k
Cities with Airbnb listings
0 +
Countries with Airbnb listings
0 M
Airbnb guest arrivals
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People staying on Airbnb per night

What is an IPO?

An initial public offering is a process by which a company lists its shares for public trading. The company decides how many shares it is going to offer, and an investment bank typically estimates the initial price of the stocks based on supply and demand. After the company’s shares are listed on the stock exchange under a particular ticker symbol, these shares can be publicly traded. 

Learn more about IPOs here >

Airbnb IPO date – When will Airbnb go public?

Despite all the media hype about Airbnb going public this year, we still don’t have an exact IPO date. Recently the company has said that it might wait until 2020, although in April, Airbnb’s co-founder Nathan Blecharczyk confirmed that the company is taking steps to be ready to go public this year.

The market is already oversaturated with giant IPOs, and maybe it’s a smart decision that Airbnb has decided to wait until the end of the year. The ‘no rush’ approach might be also caused by the company’s strong financial position and the fact that it doesn’t need an immediate cash injection to stay afloat.

What is Airbnb’s valuation?

Airbnb hasn’t officially filed papers for an IPO yet. According to the most recent internal estimates, Airbnb is likely to be valued at $38 billion, which supersedes the previous valuation of $31 billion.

For now, if this valuation remains unchanged and when the Airbnb listing is confirmed, the company will enjoy one of the world’s largest market caps within the online travel and accommodation industry. Just for quick reference: Booking.com takes the lead with $80 billion, followed by Expedia and TripAdvisor having $18 and $7.4 billion respectively.

What is Airbnb’s business model?

Airbnb’s business model is based on helping travellers to book privately owned accommodation online. It acts as a broker between traveller and property owner – allowing the owner to list their space for rent and connecting them to the traveller. Airbnb also manages payments, acts as a mediator in the case of grievances, and lists reviews of both hosts and travellers.

The accommodation listed by Airbnb ranges from private homes to hotel rooms, and even novelty lodges such as treehouses. There are listings in over 81,000 cities in 191 countries to choose from. Besides accommodation, a small part of the business focuses on restaurant and experience bookings. Airbnb Experiences offers users more than 25,000 local activities to choose from when they travel.

The strength of the Airbnb business model lies in its competitive pricing, the unique user experience and its huge global presence.

In order to stay competitive in the hotel industry, the company is currently working on diversification of its offering and including some complimentary travel services.

According to Brian Chesky, the company’s CEO, Airbnb platform is opening a studio for streaming and creating original travel content. A small part of its business is dedicated to restaurant and experience bookings. The ‘Experiences’ segment offers travellers over 25,000 local activities to choose from.

By 2022, new company’s activities, including experiences, transportation and other segments will take up a significant portion of its business. Still, Airbnb’s major revenue comes from helping travelers to book privately owned apartments online. The key drivers of Airbnb’s market success include competitive pricing, an extensive global presence and advanced user experience.

Who owns Airbnb?

The company doesn’t have one single owner. Most of the Airbnb stock belongs to the company’s founders, Nathan Blecharczyk, Joe Gebbia and Brian Chesky, who launched the business in 2008.

Besides, the company has many private investors, including Sequoia Capital, CapitalG, TCV, FirstMark and Manhattan Venture Partners among others. All in all, Airbnb has 53 investors, who gave $4.4 billion in funding.

What is Airbnb likely to be valued at when it lists?

According to internal valuations, Airbnb is likely to be valued at around $38 billion when it lists. This surpasses a previous valuation of $31 billion. However, this figure may be distorted due to media hype, and it may not reflect the true value of Airbnb stock to the customer.

When the Airbnb listing is confirmed – and if the valuation remains unchanged ­– Airbnb will have one of the largest market caps in the hotel and online travel agency industry. TripAdvisor is currently valued at $7.4 billion, Expedia at $18 billion, while Booking.com takes the lead at $80 billion.

What’s the outlook for Airbnb?

Airbnb has had major success since its launch in 2008. And, with $5 billion in the bank, the outlook is bright. To remain competitive in the industry, the company is working on diversifying and expanding its platform to include complimentary travel services. Plans also include launching a loyalty programme, attracting higher quality hotels, and creating a corporate travel business. The CEO revealed that Airbnb is even considering launching an airline.

By the year 2022, experiences, transportation and other unexplored segments could make up a considerable part of the business – even though it may still rely heavily on accommodation to create revenue.

How has Airbnb been performing?

Airbnb is outperforming many of its peers and has made a profit for two consecutive years (2017 and 2018). During the early years, the company reported a very healthy growth rate of between 150% and 300% a year. In 2013, nearly 250,000 properties were added to Airbnb and revenue started growing at an incredible pace – almost 1000% between 2013, when it was $250 million, and 2017, when it reached $2.6 billion.

In 2017 it posted a $93 million profit from its $2.6 billion income, and in the third quarter of 2018 it raked in more than $1 billion. Final revenue and profit figures for 2018 have not yet been released.

Who are Airbnb’s biggest competitors?

Airbnb’s biggest home-sharing competitors are HomeAway, VacayHero and HouseTrip, to name a few. However, Airbnb’s presence across the globe far outweighs any of these companies, and none of them have released an initial public offering. As for online travel sites, Airbnb shares the limelight with the likes of Booking.com, which does sell shares to the public.

While there are many similarities between Airbnb and other home-sharing services, it remains the forerunner in the market. Besides having more rooms listed than the top five hotel groups combined – a staggering 6 million – Airbnb also has more (and less conventional) options to choose from, such as castles, boathouses and treehouses.

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At starttrading.com, our goal is to empower you to become a more successful trader and unlock financial freedom. We provide you with the information and educational content needed to learn how to trade.

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Trump’s Trade War May Be Driving Chinese Investors to Bitcoin

Trading Blog | 5 min read 

Trump’s Trade War May Be Driving Chinese Investors to Bitcoin

As the Chinese Yuan (CNY) falls in value due to factors like the ongoing trade war with the US, there are signs that locals are increasingly moving funds into bitcoin.

Written by Starttrading.com

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Trump trade war Bitcoin

Investors have been pilling money into Bitcoin since the start of the US-China trade war

  • Many investors have bought gold, a conventional haven asset, as the US-China trade war continues to weigh on global growth and market sentiment.
  • People also ploughed money into bitcoin during key moments in the trade war, according to eToro data.
  • Trading of bitcoin surged 140% during these key moments.
  • However, the cryptocurrency remains much more volatile than gold.

Investors appear to be treating Bitcoin as a haven asset similar to gold, given the volume of cryptocurrency trading has increased during the conflict.

There was a 284% surge in bitcoin trades between 19 May 2019 and 19 August 2019, compared to the period between 22 March and 22 June 2018 just after the trade war, according to data from eToro, an online trading platform.

Gold — a popular asset to hold during times of uncertainty — rose by a less dramatic 73% over the same period.

Trading of Bitcoin more than doubled during certain key moments of the trade war, the data showed —usually after tensions calmed.

 

US-China Trade War and Its Effect on Cryptocurrencies

According to a Bloomberg analysis of prices over 30 days, the negative correlation between the yuan and bitcoin has fallen to a record low in the last seven days.

While previously the Chinese government has sought to keep the value of its national currency above 7 CNY to the dollar, last month the yuan was allowed to slide below that level, dropping to its lowest for 10 years. The move was reportedly in response to U.S. President Donald Trumps threats in early August to impose a 10 percent tariff on Chinese imports.

That the drop in yuan value is causing a flight by Chinese investors is backed up by exchange data. Bloomberg spoke to Dr. Garrick Hileman, research director at Blockchain and CoinDesk contributor, who said that bitcoin prices on exchanges such as Huobi that cater more to Chinese traders are trading at a premium.

The inverse correlation between bitcoin and the yuan also notched up in April and May “as the tensions ratcheted up with the deterioration on U.S.-China trade relations,” Hileman said.

The report comes as new details emerge on China’s own national digital currency. The recently appointed chief of the digital currency division of the People’s Bank of China has said the upcoming digital yuan will have features not offered by Facebook Libra.

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At starttrading.com, our goal is to empower you to become a more successful trader and unlock financial freedom. We provide you with the information and educational content needed to learn how to trade.

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Stop-Loss Orders – Risk Management Basics

Understanding stop-loss orders - Risk management basics

The stop-loss order is one of those little things, but it can also make a world of difference. Even the most inexperienced traders can benefit from this tool in some way. Read on to find out exactly what a stop-loss is and how to use one.

What is a stop-loss order?

A stop-loss order is simply an order that limits your risk by closing out your position at a small loss at a specific price. If you buy a stock at $20 and place a stop-loss at $19.50, when the price reaches $19.50 your stop-loss order will execute, preventing further loss.

Stop-loss orders are usually “market orders,” meaning it will take whatever price is available once the price has reached $19.50 (can be based on the bid, ask or last price touching $19.50). If no one is at that price to take your trade-off your hands, you could end up with a worse price than expected. This is called slippage. As long as you are trading Stocks, currencies in the Forex Market, or futures contracts with high volume, slippage while day trading isn’t usually an issue.

Positives and negatives

The advantage of a stop-loss order is you don’t have to monitor how a stock is performing daily. This convenience is especially handy when you are on vacation or in a situation that prevents you from watching your stocks for an extended period.

The disadvantage is that a short-term fluctuation in a stock’s price could activate the stop price. The key is picking a stop-loss percentage that allows a stock to fluctuate day to day while preventing as much downside risk as possible. Setting a 5% stop loss on a stock that has a history of fluctuating 10% or more in a week is not the best strategy. You’ll most likely just lose money on the commission generated from the execution of your stop-loss order.

There are no hard-and-fast rules for the level at which stops should be placed. This totally depends on your individual investing style: An active trader might use 5% while a long-term investor might choose 15% or more.

Another thing to keep in mind is that, once you reach your stop price, your stop order becomes a market order and the price at which you sell may be much different from the stop price. This fact is especially true in a fast-moving market where stock prices can change rapidly.

Not just for preventing losses

Stop-loss orders are traditionally thought of as a way to prevent losses, thus its namesake. Another use of this tool, though, is to lock in profits, in which case it is sometimes referred to as a “trailing stop.” Here, the stop-loss order is set at a percentage level below the current market price, not the price at which you bought it. The price of the stop-loss adjusts as the stock price fluctuates. Remember, if a stock goes up, what you have is an unrealised gain, which means you don’t have the cash in hand until you sell. Using a trailing stop allows you to let profits run while at the same time guaranteeing at least some realised capital gain.

Continuing with our example from above, say you set a trailing stop order for 10% below the current price, and the stock skyrockets to $30 within a month. Your trailing-stop order would then lock in at $27 per share ($30 – (10% x $30) = $27). Because this is the worst price you would receive, even if the stock takes an unexpected dip, you won’t be in the red. Of course, keep in mind the stop-loss order is still a market order—it simply stays dormant and is activated only when the trigger price is reached—so the price your sale actually trades at may be slightly different than the specified trigger price.
 

Advantages of the stop-loss order

First of all, the beauty of the stop-loss order is that it costs nothing to implement. Your regular commission is charged only once the stop-loss price has been reached and the stock must be sold. You can think of it as a free insurance policy.

Most importantly, a stop-loss allows decision making to be free from any emotional influences. People tend to fall in love with stocks, believing that if they give a stock another chance, it will come around. This causes procrastination and delay, when giving the stock yet another chance may only cause losses to mount.

No matter what type of investor you are, you should know why you own a stock. A value investor’s criteria will be different from that of a growth investor, which will be different still from an active trader. Anyone strategy may work, but only if you stick to the strategy. This also means that if you are a hardcore buy-and-hold investor, your stop-loss orders are next to useless.

The point here is to be confident in your strategy and carry through with your plan. Stop-loss orders can help you stay on track without clouding your judgment with emotion.

Finally, it’s important to realize that stop-loss orders do not guarantee you’ll make money in the stock market; you still have to make intelligent investment decisions. If you don’t, you’ll lose just as much money as you would without a stop-loss, only at a much slower rate.

Where to place a stop-loss order when buying

A stop loss shouldn’t be placed at a random level. The ideal place for a stop loss is at a location which allows the market enough room to fluctuate a little while it starts to move in your favour, but gets you out of your trade if the price turns against you. 

One of the simplest methods for where to place a stop-loss order when buying is to put it below a “swing low.” A swing low occurs when the price falls and then bounces. It shows the price found support at that level.

You want to be trading in the direction of the trend. As you buy, the swing lows should be moving up. The chart shows several potential entry points along with possible stop-loss locations for each entry.

Where to place a stop-loss order when short selling

A stop loss shouldn’t be placed at a random level. The ideal place for a stop loss is at a location which allows the market enough room to fluctuate a little while it starts to move in your favor, but gets you out of your trade if the price turns against you. 

One of the simplest methods for where to place a stop order when short selling is to put it above a “swing high.” A swing high occurs when the price rises and then falls. It shows the price found resistance at that level.

You want to be trading in the direction of the trend. When looking for short trades the swing highs should be moving down. The chart shows a potential entry along with a possible stop-loss location for a short trade.

Where to place a stop loss – alternatives

Above a swing high when shorting or below a swing low when buying isn’t the only place to put a stop loss. Depending on your entry price and strategy, you may opt to place your stop loss at an alternative spot on the price chart. 

If using technical indicators, the indicator itself can be used as a stop loss level. If an indicator provided you with a buy (go long) signal, a stop loss can be placed at a price level where the indicator will no longer ​signal it’s wise to be long.

Fibonacci Retracement levels can also provide stop loss levels. 

Volatility is also commonly used to set stop-loss levels. An indicator such as Average True Range tells how much the price typically moves over a period of time. Traders can set a stop loss based on volatility, attempting to place a stop loss outside of the normal fluctuations. This can also be done without an indicator by measuring the typical price movements on a given day and then setting stop losses and profits accordingly. 

Define your stop loss strategy

Stop-loss levels shouldn’t be placed at random locations. Where you place a stop loss is a strategic choice and should be based on testing out and practising multiple methods – finding which works best for you.

A trading plan is where you define how you will enter trades, how you will control risk and how you will exit profitable trades. Isolating the trend direction and controlling risk on trades is of paramount concern when learning how to day trade. When starting out, keep trading simple. Trade in the overall trending direction, and use a simple stop loss strategy that gives enough room for the price to move in your favor, but cuts your loss quickly if the price moves against you.

Conclusion

A stop-loss order is a simple tool, yet so many investors fail to use it. Whether to prevent excessive losses or to lock in profits, nearly all investing styles can benefit from this trade. Think of a stop-loss as an insurance policy: You hope you never have to use it, but it’s good to know you have the protection should you need it.

What Is An Initial Coin Offering (ICO)?

What is an initial coin offering (ICO)?

Initial Coin Offerings (ICO) are the hot new way to raise funds for new blockchain based companies, but what are they? In this guide we will explain everything you need to know about ICOs and how to invest in one. 

by Starttrading.com

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If you’ve been kicking yourself for not getting in on the ground floor of top cryptocurrencies such as Bitcoin and Ethereum, you might want to consider looking into investing in an Initial Coin Offering. An Initial Coin Offering commonly referred to as an ICO, is a fundraising mechanism in which new projects sell their underlying digital tokens in exchange for bitcoin and ether.

Investing in ICOs

Whereas Bitcoin primarily focuses on payments and moving money between ecosystems, ICOs support companies with almost limitless applications. Here’s how it works, a document is created essentially detailing exactly how the system would work and why it’s a great idea that could be very useful, usually called a white paper. Then, people are asked to send money, usually, Bitcoin or Ether, but also traditional fiat currencies, and in return investors are returned with the new cryptocurrency or virtual token created. Investors hope that the new cryptocurrency will get used a lot and be in high circulation, which would, in turn, raise the value of the currency.

Most ICOs work by having investors send funds, usually bitcoin or ether, to a smart contract that stores the funds and distributes an equivalent value in the new virtual token at a later point in time. It’s important to note that unlike an Initial Public Offering, also known as an IPO, investing in an ICO won’t result in you having an ownership stake of the company you’re giving money to. You’re gambling that the currently worthless currency you pay for now will increase in worth later and make you money.

When investing in ICOs, you often have the option to become part of the development of new, upcoming technology. They often have a network of supporters already in place, which means the investment is already in a much stronger position to see faster growth. ICOs offer the opportunity to see gains much quicker and can take profits out of the company invested in more easily.

The success of an ICO is influenced by many aspects. Despite being a relatively new fundraising model, popularity has rapidly increased in recent years. As many of the ICOs are based on new blockchain technology, you need to have a thorough understanding of what you are putting your money into, as well as your financial requirements and understanding of the investment landscape. As with any investment decision, buyers and sellers need to find out as much information as possible – establishing both the positive and negative points.

What’s the difference between ICOs and IPOs?

How is buying a token different from buying a stock? Although the concepts are very similar, ICOs and IPOs differ significantly in terms of their mechanics and regulatory frameworks. IPOs are developed and organised by established private companies who are looking to start selling shares in the public domain. On the other hand, ICOs are organised by startups to raise seed money. This investment will not result in the individual having an ownership stake of the company, instead, it is an opportunity for the token to gain value over time.

The startups often don’t have a product ready, so they conduct ICOs based on their product idea and utility. When conducting ICOs, there are not many strict regulatory guidelines to stick to and they are not restricted by international borders. Usually, a percentage of the tokens is sold to ICO participants and a percentage kept for the company’s needs – which allows investors to fund the projects they like.

When investing in a stock you are purchasing a piece of the equity and operating company. Anything the company does such as cash flows or profits, you own a portion of that. Fundamentally tokens are different. You are not buying part of the company, you are buying the money supply of the future technology project. For example, a future casino being built, and the owner wants you to invest in the casino chips before the finalisation of the casino. This is similar to token sales; the team wants you to buy the tokens before the creation of the technology and platform. If the technology or platform is well used, the value of the tokens will correlate with the value of the company.

How to choose an ICO to invest in

When looking for quality ICOs to invest in, it is important to find a strong development team, preferably individuals with cryptocurrency experience, who can exhibit past successes. The white paper is also a crucial aspect of your investment, as this is what describes every aspect of the project itself. This includes the initial concept, the technology behind it, as well as the circulation of tokens and how they will be used. This crucial information will help you understand the logistics behind the project, helping you to become part of exciting future technology advances.

There are plenty of other techniques when it comes to evaluating tokens, it’s important that you view our in-depth guide on how to evaluate different tokens like a pro.

What to look out for?

Whereas Bitcoin primarily focuses on payments and moving money between ecosystems, ICOs support companies with almost limitless applications. Here’s how it works, a document is created essentially detailing exactly how the system would work and why it’s a great idea that could be very useful, usually called a white paper. Then, people are asked to send money usually Bitcoin or Ether, but also traditional fiat currencies, and in return, investors are returned with the new cryptocurrency or virtual token created. Investors hope that the new cryptocurrency will get used a lot and be in high circulation, which would, in turn, raise the value of the currency.

Most ICOs work by having investors send funds, usually bitcoin or ether, to a smart contract that stores the funds and distributes an equivalent value in the new virtual token at a later point in time. It’s important to note that unlike an Initial Public Offering, also known as an IPO, investing in an ICO won’t result in you having an ownership stake of the company you’re giving money to. You’re gambling that the currently worthless currency you pay for now will increase in worth later and make you money.

How can we help you?

As an establishment, we are an incredibly dedicated team of individuals who help offer online trading courses for beginners in cryptocurrencies. If you are just learning to trade and want to know how to invest in the stock market and digital currencies, our specialists can guide and support you on your learning journey.

Are you interested in participating in embarking on a course of online trading for beginners? The starttrading.comwebsite is where you need to be. Please feel free to complete the contact form on our website and we will get back to you as soon as possible.

Conclusion 

At the bottom line, ICOs are an incredibly new way of raising money, and everyone is trying to adapt to the new ways without getting screwed over. If you think you’re able to make a killing on a promising new ICO, just make sure to do your homework beforehand. Cryptocurrency is all about high risk, high reward, and ICOs are no different.

Be warned, ICOs are highly risky even under the best of circumstances and have a high potential for scams. How can you tell what’s a scam and what’s real? The first point is that the ICO itself could be a scam or a ponsy scheme.

When looking into an ICO as an investment you need to make sure that there is a solid business plan and a product, instead of some sort of promise of financial gains or rewards. You must ensure that the ICO website or contribution page is the official project page, instead of a phishing page generated by hackers to lure investors into crowdfunding to a 3rd party. Aside from these easily avoidable scams, you need to look out for aggressive marketing tactics, such as paying influencers to positively promote the virtual token.

A lot of ICOs use bots for social media, when seeing information about the ICO make sure the engagement is coming from real followers. Using all of this information when seeing information about the token, highlights the importance of doing your own research and staying sceptical.

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What is RSI? How to Trade using Relative Strength Index (RSI)

Trading Blog | 5 min read 

How to trade using the Relative Strength Index

The Relative Strength Index is one of the best indicators to determine whether an asset is over or undervalued and in turn determine the best time to trade (buy/ sell). 

Written by Starttrading.com

 

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Have you ever entered a trade or bought an asset hoping for the trade to go your way, but instead the trade has instantly gone the other? Don’t worry it happens to beginner traders every single day. If only there was a way to see how over or under valued a currency pair, stock or cryptocurrency is at any time… It’s your lucky day, this ultimate beginners guide to mastering technical analysis is going to break down the Relative Strength Index (RSI) and show you how to trade using it!

What Is Relative Strength Index – RSI?

The relative strength index (RSI) is a momentum indicator that measures the magnitude of recent price changes to evaluate overbought or oversold conditions in the price of a currency, stock, cryptocurrency or any other asset. The RSI is displayed as an oscillator (a line graph that moves between two extremes) and can have a reading from 0 to 100.

Typically traders interpret an RSI value of 70 or above as an indication that a security is becoming overbought or overvalued and may be primed for a trend reversal or corrective pullback in price. An RSI reading of 30 or below indicates an oversold or undervalued condition.

What does Overbought mean?

An overbought asset means that the asset is currently overvalued and that excessive buying has lifted prices. Anytime the RSI level is above 70 it means that the asset is overbought (recently having a hard run up).

This is usually due to the market becoming irrational, such as during news releases. Often leading to FOMO (Fear Of Missing Out), in which ‘late comers’ will start to enter positions to try and make a quick profit.

Typically when a currency, stock, community or cryptocurrency is overbought it is not a good opportunity for you to BUY or open a LONG position. As the market will likely correct to the downside. Try to think of this as a car driving up a very steep hill and having to take regular breaks to cool off the engine, meaning the price needs to cool off before it can continue higher.

On the other hand, anytime the RSI level is above 70, this is likely a much better opportunity to SELL or open a SHORT position. When trading, especially using the RSI its important to remember the famous Issac Newton quote “What Goes Up Must Come Down”.

What does Oversold mean?

An oversold asset means that the asset is currently undervalued and that excessive selling has dropped prices. Ironically, this is also usually due to the market becoming irrational, however, lower prices often lead to FUD (Fear, Uncertainty and Doubt).

This is usually due to rising sell pressure caused by news events, supply zones, market panics and selloffs. Typically when a currency, stock, community or cryptocurrency is oversold it is a good opportunity for you to BUY or enter a LONG position. As the market will likely correct to the upside in the near future.

RSI Example

When it comes to technical analysis and in particular the Relative Strength Index. No currency pair or cryptocurrency stays as strict to the RSI as Bitcoin. As shown in the example, throughout the history of Bitcoin, anytime the RSI level has been over 70 the price has seen a sharp correction back down, correlated by a drop in RSI level to below 70.

When trading Bitcoin it often drops straight into oversold territory below 30, this is when experienced traders are likely to place BUYS or LONG positions. The probability is much greater that the price will bounce from oversold levels.

Alternatively, when the price is over 70 on the RSI and considered overbought, there is a much higher probability that the price will decrease in value, as it has proven to do so time and time again.

Limitations Of The RSI

The RSI compares both bullish and bearish price momentum and displays the results as an oscillator that can be placed alongside a price chart. Like most technical indicators, its signals are most reliable when analysing the long-term trend. True reversal signals are rare and can be difficult to separate from false alarms.

Since the indicator displays momentum, as long as an asset’s price momentum remains strong (either up or down) the indicator can stay in overbought or oversold territory for long periods of time. Therefore, the RSI is most trustworthy in an oscillating market when the price is alternating between bullish and bearish periods.

Conclusion:

This is also how institutional investors and the “smart money” invest capital, it is extremely important to trade like the smart money and have the mindset of an institutional investor to benefit like one. Following the simple RSI strategy laid out will greatly improve how you determine whether an asset is over or undervalued and allow you to get the best results out of your trades.

Remember the aim of the game is to “buy it low and sell it high” and don’t trade with your emotions or let your emotions overcome your better judgement. It is important to note that the RSI indicator can stay overbought and oversold for long periods of time.

Start trading the right way

At starttrading.com, our goal is to empower you to become a more successful trader and unlock financial freedom. We provide you with the information and educational content needed to learn how to trade.

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What is the Stock Market? A Beginners Guide to Stock Trading

What is the stock market? A beginners guide to stock market trading​

This guide provides a detailed overview of what the stock market is, understand stocks and what drives the value of a stock. By the end of this guide, you will have a solid basis to start trading and investing in stocks.

by Starttrading.com 

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When making any investment it is important to gain some understanding in what you’re getting into. This will allow you to achieve the best results possible and limits the amount of mistakes made. If you want to actually learn how to trade stocks you’ll need a basic understanding to begin with, on how stock trading works which will be explained in this article. After reading this stock market guide you will have an a basic understanding to get started trading stocks, if you want to take your trading tot he next level a trading mentor is very beneficial, especially if you are looking to make money from stocks in the long run. 

What is a stock?

A stock is a type of investment which allows you to have a share in a company. When you buy a stock from a business you’re essentially purchasing a small piece of that company which is called a share. Shareholders contribute to the company’s’ profits as they are investing into the company’s future as long as they own their shares. Investors typically buy stocks from companies that they predict will increase in value over time. If this happens then the stock brought can be sold for a profit. For many businesses distributing stock creates an opportunity to raise money to invest and expand in their company. Whilst for investors or potential investors like yourself, stocks enable a growth in your money and outpace inflation in due course.

The main goal when investing into the stock market is to make a profit by selling the stock for more than you paid for.

What is stock trading?

The stock market provides a secure and regulated environment for traders to participate in regular activities of buying, selling of shares in publicly held companies with a zero to low operational risk. The supply and demand of each company’s stock is tracked through stock exchanges which directly affects stock prices. Public companies sell their stock through a stock market exchange like the New York Stock Exchange (NYSE) or Nasdaq for example although there are many other stock markets exchanges all over the globe. Investors are then able to buy and sell these shares among themselves through stockbrokers.  Stockbrokers are individuals or firms who are licensed to trade stocks through the exchange-this allows them to buy and sell at your request. In exchange for dealing with individuals trades, the broker collects a commission or a fee. You can sign up to a stock broker here >

Long–term vs. short-term stock trading

With fluctuations in the market happening on a daily basis there are two main strategies used by investors: short-term trading or long term trading also known as buying and holding. Investors who do best over the long term have a diversified portfolio of many stocks which they hold onto through good and bad times. This approach requires you to wait until the stock’s value has increased over an extended period of time – also known as passive trading. Having patience and the ability to overlook short term fluctuations is needed with long term trading as it is the ongoing performance of the stock which is important not the recent ups and downs happening on a daily basis.

On the other hand, short term trading is about using the constant volatility and fluctuating prices in the market to your advantage.  Investors who use this method of trading watch the markets for opportunities to buy low and sell high making numerous of trades in a short time period- also known as active trading. This type of trading comes with a potential for easy profit but is also associated with risks such as there may not be rise in value of a low stock price over a short period of time or it may actually lose value. Investors also end up paying more capital tax the more frequently they sell their shares. This was pretty much done to encourage traders to trade over a long term scale. There are many styles of short term trading such as day trading, intraday trading and scalping.

How to invest in stocks

Before you start trading or investing in stocks it is essential that the money you are investing is NOT more than you can afford to lose. This is due to the fact that you will need to be willing to lose some or all of that money as a beginner. The stock market is forever fluctuating and you can never be in control of business setbacks. You also have to consider that the riskier the investment, the higher the potential rewards and losses. With active trading timing, the market is a tricky thing to do as you have to choose the right opportunities twice – once when you buy the stock than another when you sell it.

Traders using this approach will benefit from short term changes in the market by frequently buying and selling based on trends. At starttrading.com, we offer copy trading services, which thousands of beginners people are using on a daily basis, who don’t have the time watch to the market but are looking for short-term rewards. Copy-trading allows you to copy the trades of experienced professionals who have high success rates for every trade they make.

As an investor, your choice in a broker is important because it has huge implications for how much you’ll pay in fees, the types of investments you have access to and what your eventual returns will amount to. You can sign up to a stock broker here >

Some brokers are known as discount brokers who execute trades inexpensively but typically don’t provide any personalised guidance. Full-service brokers offer a comprehensive variation of services including investment advice however the higher quality of service will require a higher fee which some find worth every penny. Both services have pros and cons but it depends on what approach in investing works best for you and what your goals are.

Many first time investors believe that to make money in the market you have to pick individual stocks but this is not the case. It takes time and patience to build a diversified portfolio of individual stocks as you need to do your research in each area of investment.  Alternatively many investors especially those with experience have made their successes through using mutual funds and exchange-traded funds which is also a good place for beginners to get started in trading. This provides automatic diversification that helps to protect your portfolio from inevitable market setbacks even if you have little money to invest. Mutual funds and exchange-traded funds provide a basket of investments in different areas of the markets in one single package.

What determines the stock price?

As I have mentioned a few times the prices in the stock market constantly fluctuate on a day to day basis, you might be asking yourself, what makes stock prices fall and rise?

The very straightforward answer is supply and demand. The price changes in the market reflect the supply and demand in that present moment so when a stock is seen as desirable then the stock price will increase. Factors could include a company’s recent success, a strong industry sector or just plain and simple popularity.

On the other hand, investors may be unwilling to purchase a stock due to a weak industry sector, company failings or the fact that the price is too high. This is called a lack of demand which will inevitably cause the stock price to drop. When this happens at some point the price will reach a point low enough for investors to start buying again where the cycle will repeat itself, this is known as market cycles. These are the trends which active traders will be looking out for.  Passive traders who take on a long term approach to trading would invest in stocks which have strong earnings and a bright future and wait for the price to rise over a long period of time.

Advantages of trading the stock market? 

Investment gains

  • The most prominent advantage of buying or selling stocks is investment gains. Over time the stock market tends to increase in value despite the prices of individual stocks fluctuating daily. Investments in steady companies that are able to grow to give investors returns on investment through profits. With the potential to grow wealth through value appreciation of assets the stock market attracts those with efforts to secure their financial future.

There are two trading methods to make money

  • The stock market gives you the option to make money on both a long term and short term basis. Some stocks also offer the opportunity to earn dividends which provides additional investment income. Dividends can be defined as a payment made by a business to its shareholders. The payouts are usually made in cash although they can also be distributed in stock dividends where stock shares are allocated to shareholders.  In essence, a dividend is basically a reward given to shareholders for owning stock in the corporation.

Easy to buy

  • Buying stocks isn’t as formal as it used to be, with electronic and technological advancements buying stocks online literally takes minutes. You can purchase your shares through a broker, financial planner or online.

The Best way to outpace inflation

  • Historically stocks have averaged an annualised return of 10% although it does mean you must have a longer time scope. Nevertheless, stock investments still outrun the average annualised inflation rate of 3.2%.

Disadvantages of trading the stock market? 

You could lose all your investment

  • When a company does poorly, the investors will sell allowing the stock prices to plummet. As you sell during the company’s hardship you are exposed to losing your initial investment. If losing your initial investment is something you can’t afford to do then you should consider buying bonds. This provides an income tax break if you lose money on your stock loss.

Can be very time consuming

  • Before buying a stock you have to research every company to determine how profitable it will be for you in the long run. You have to learn how to read financial statements, annual reports and keeping up to date with your company’s developments in the news. It is also required to monitor the stock itself as even the best company’s price will fall in the market.

Stock trading can be an emotional rollercoaster

  • Stock prices increase and decrease second by second and many individuals buy high out of greed and sell low out of fear. Focusing on the price fluctuations of stocks can be damaging to your investment especially without patience. It is best to check on a regular basis rather than constantly watch the prices.

You are competing with professionals

  • Along with knowledge and time professional traders and institutional investors have refined trading tools, computer systems and financial models at their disposal which some find intimidating.

Conclusion

To conclude although there are risks to investing in stocks, these can all be minimised with the right guidance and approach to what method of trading is best suited to your goals. Start trading provides services which can both teach and guide you into the right direction of a bright financial future in the stock market. With our mentoring services available you’ll be able to gain the confidence necessary in making sound trades and investments in the Stock, Forex and even Cryptocurrency markets. Book a FREE consultation with one of our trading mentors today for more information or to discuss any of the topics mentioned in this article in further detail.

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