10 Great Trading Tips for Investing Money Online

10 Great Trading Tips for Investing Money Online

When investing money online, you need to learn the basics. There are countless ways to learn them, especially nowadays when you can obtain information in one click. The information will never stop innovating, and you should start improving your trading skills right now.

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You need all the help you can get to catapult to the forefront of the trading world. That’s why we’ve compiled these 10 great trading tips! Read on, and start investing money online with better skills.

Hit the Books

Hitting the books may sound old fashioned and out of style for some, but it’s still one of the best way to learn a lot. There are so many published trading-related books out there, many of which provide useful insights about the market.

Very successful traders tend to share how they ‘cracked the code’ and made good money. It’s just right that you take advantage of those and maybe develop your very own tactic. Hunt for some published books and devour every tip and insight you can get.

And even if you don’t have the time to drop by the nearest library, there are tons of PDFs online. All you need is the right link and the right app to access these. There are even free online books. Take these things and make them work to your advantage.

Remember: you should be your best investment. So stack up some knowledge and feed the mind.

Always be in the Loop

Aside from books and PDFs, other great sources of information are online articles that update traders about the latest peaks and valleys of the market. Thousands of websites publish updated and relevant news and information.


If you have already invested on a company, make sure that follow every update about it. Know the latest decisions that the executives made. Learn to read between the lines. Analyze each and every piece of news about it, and make sure you’re critical of what you hear.

You don’t want to miss out of many things that happen. So it’s better if you also read articles about other markets, like commodities, real estate, currencies, and stocks. It’s a given fact that these markets are either directly or inversely related. One movement in one market may affect movements in other markets.

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Find a Good Broker

You cannot start trading without finding a broker to assist you. So find a broker—a good broker. Read some things about the qualities of a good broker.

There are thousands of brokerage firms you can communicate with online. But first, you have to set up some criteria. These should reflect your expectations and goals. Do not make a deal on the very first brokerage firm you encounter. Rather, it’s better to list down your top 3 or top 5 brokerages, and then compare their qualities.

Read customer reviews so that you can get a better feel of the brokerage’s services. Know the most important and most basic features a brokerage should have. These include leverage, lot size, account types (margin accounts and cash accounts), among others.

Find someone who can be your Mentor

Aside from your broker, who will help you make trading decisions, you should also find a mentor. This person can be your friend, a family relative, a co-worker, or anyone who has ample experience. He or she must have the fundamental understanding of the market.

A good mentor should be willing to answer the questions you might have. He or she should provide help. This person should be someone who could recommend useful sources. More importantly, he or she should give logical advice when the going gets tough.

In other words, find someone who has solid experience in the market; someone who knows what he’s doing.

If you can’t find a person like that, it may be helpful to join some forums. In these forums, traders talk and discuss with other fellow traders. They exchange ideas about the market and the latest price movements. It’s almost certain you can find a buddy there willing to help you out.

On the flip side, you should still do your own research and follow your guts even if your buddy tells you otherwise. We say you should listen to advice, but take them with a huge grain of salt.

Learn from the Legends

The markets have spawned investing and trading legends. Warren Buffett and Carl Icahn are just two of them. As we have stressed early on, you should stack up knowledge. And what better way to do that than to learn from the legends?

Warren Buffett, Investing money online

Read about what they have done before and how they survived various market crashes and market corrections. Take note of their statements and tips. If you can, find a pattern from their investing philosophy.

For instance, Warren Buffett tells us we should never invest in something we don’t fully understand. This mantra has worked and served him for decades. And he still beats the market using this approach. Meanwhile, Icahn is famous for his ability to boost a seemingly lackluster company, giving them what is now called the ‘Icahn lift.’

It’s also important to be creative, meaning you can devise your own philosophy. The more you know about others’ philosophies, the better you can make online trades.

Choose trading style that Fits your Personality

Once you have got yourself set up and have a working account, it’s time to choose a trading style. And when choosing a trading style, find one that fits your personality.

If you’re more into action and thrill, you can try day trading, where you close multiple positions in one day. If that doesn’t sound too good, you can try swing trading. You just search for price swings and hold positions for some days to a week. If you’re the patient-type, you can try position trading, which can last for a week, months, or a year. Momentum trading is also an option.

The idea is to find a style that makes you comfortable. It should be one that doesn’t stress you out or disrupt your mood. Different trading styles require different levels of attention and risk tolerance. If you don’t pick the right one, you’ll have sleepless nights and possibly fatigue. This can therefore lead to bad trading decisions, making you lose more than what you gain.

You can always change your trading style later, if you think you’re ready to try out new ticks.

Consider your Lifestyle

In addition, you cannot comfortably trade if your lifestyle has been disrupted. You have a life outside the trading world. You cannot miss important events like your kids’ graduation, or some family events. And you have to keep mingling with people.

As with your personality, your trading style should also suit your lifestyle. Again, different trading style demand different levels of attention. You can do some of them in just an hour or so. Some of them require you to sit in front of your computer for more than 2 hours on end.

Aside from that, you’re going to invest energy, time, and effort. Trading will definitely divide your attention, meaning you can’t spend as much time for other stuff as before.

The main point is to keep yourself comfortable, helping you to come up with wise, logical decisions.

Practice Trading via Demo Accounts

You can test and try out your skills via demo accounts. This is also known as paper trading, where you trade on a virtual market in real-time using virtual money. It’s basically like real trading, but without using any real fund.

This is very popular for rookie traders who want to test the waters first before diving headfirst. It offers a lot of benefits besides practicing your chosen trading style. While you’re at it, learn some tips on how to make the most out of demo account.

When you use a demo account, you can experience real trading—if you treat it as if it were real. By doing so, you can gauge if trading can be your long-term career. Take advantage of it by trying out strategies and experimenting. You would also learn something about risk management and asset allocation.

Simply put, a demo account lets you familiarize yourself with all the quirks in the market.

Investor reading a financial newspaper. investing money online

Learn Technical Analysis

For traders, technical analysis is a weapon they can use to make quick money out of price movements. Basically, technical analysis enables them to predict the next up or down of prices with charts and indicators.

While it’s not the sole effective approach, technical analysis has proven useful for traders. When doing technical analysis, your goal is to find the most appropriate entry and exit points. So timing is the key. Again, you can practice your technical analysis skills by using a demo account.

Learn how to use various charts and tools to help you analyze price movements. Among these are moving averages, Bollinger bands, and oscillators. Different indicators provide different insights regarding price movements. Familiarize yourself with each of them. Combine their functions to maximize the benefits you can get.

Learn Fundamental Analysis

Many traders often cite fundamental analysis as the polar opposite of technical analysis. This is because instead of focusing on price movements, fundamental analysis tries to gauge the business or industry underlying the asset. You will have to look at the financial health and balance sheet of a company.

For instance, you want to know the financial health of a business that issues that stock you want to invest in. Your goal is to find the intrinsic or actual value of the stock. To do that, you have to assess the business. Check its business model, its management, and the industry it belongs to.

Fundamental analysis gives you the chance to find an undervalued stock and buy it. You’ll have to wait until the market reflects its real value, which is your chance to gain some profits.

Investing Money Online: The Conclusion

Investing money online is not easy. You’ll have to understand that it’s never a child’s play. Therefore, you must prepare very well for it. Never start trading without a solid plan that will guide you through your journey. The biggest mistake you can make is to think that you can play things by ear.

Investing money online requires you to be prudent and logical. So never, ever get swayed by your emotions. Do not start trading thinking that you will never get affected by anxiety and too much excitement. Once your emotions take over your head, your trades will reflect them.

Overall, the best method of investing money online is improving your discipline and critical thinking first.


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