Frequently Asked Questions (FAQs)

This is an impossible question to give a straight answer to because every trader has to set their own trading budget based on their opportunities, economic situation, and trading goals. With that being said, there are a few golden rules that everyone should follow when it comes to the amounts used for trading.

The number one rule is to never trade using funds that you cannot afford to lose. Trading (and investments) is a privilege that you can only enjoy if you can afford it. This means that you need to pay all your bills, debts, and other necessary expenses before you even consider opening a position with real money.

The second rule is to set a budget and to stick to that budget no matter what. Naturally, the budget has to be based on your available funds and your economic situation.

Lastly, the amount of money you can trade with the first time around will depend on the broker you pick. This is because every broker has their own minimum deposit levels needed to activate your trading account. Today, there are brokers with £0 in minimum deposit as well as brokers with £250+ in minimum deposit. Because of this, we suggest that you find a broker with a minimum deposit level that suits you.

Technical analysis is one of two main ways to analyze stocks and various assets. The other method is called “fundamental analysis”.

Now, technical analysis is based on price data, previous trends, and graphs. This method involves studying how a specific asset or instrument has behaved in the past and base your trading strategy on those behaviors.
To explain it further, fundamental analysis focuses on real-life events such as company profits (when trading stocks), environmental crises (that can affect markets around the world), political elections, etc.

Professional traders tend to use a combination of the two, but most people find that a technical analysis – while being more complicated – is the most efficient and accurate way to analyze financial instruments.

Technically, day trading can replace your day job. In fact, there are tens of thousands of day traders that make a lot of money from trading, often more than they would have at a regular job.

With that being said, there are really no guarantees that you will ever make enough from trading that you can abandon your regular job. We would never recommend anyone quitting their job before they are confident that their trading efforts are worth it.

Now, if your goal is to stop working and start day trading, we’re not going to stop you. Just be aware that it will take years of practice and studying to get all the skills needed to trade at this level. Even then, there are still no guarantees that you will succeed.

Note! Upwards of 70 percent of all retail traders lose money when trading!

The difference between investing and trading is all about the timeframe that you keep your positions open. When trading – either day trading or swing trading – your goal is to open and close positions within a day (day trading) or several days or weeks (swing trading).

Investing, on the other hand, involves buying an instrument today with the intention to sell it for a profit in a few years from now. As you can imagine, investing is not as time-consuming as you can leave the investment for as long as you want to. The benefit of trading is that you can make regular profits from several positions.

In the end, the strategies used to invest and trade are similar and you use the same analytic methods for both.

Getting started trading is not very difficult. In fact, all you need is to find a suitable broker, make a deposit, and start trading. But we wouldn’t recommend anyone to start trading that quickly since trading is too involved and the risks are too high.

Therefore, we suggest that you use our extensive guides and broker comparisons to find a reliable broker that you enjoy. After that, you can sign up and make a deposit but before you start trading with real money, you should opt for a demo account.

A demo account allows you to trade in a risk-free environment but under real market conditions, which in turn gives you the opportunity to practice trading. While using the demo account you should start studying the ins and outs of trading, develop basic knowledge, and master a few strategies.

If you follow these steps, you will improve your chances of making a profit in the long run. Just keep in mind that it will take a lot of effort, time, and trial and error before you can expect to make any real profit.

Technically, you can trade without a broker. Although to get access to the exchanges and markets around the world, you need a broker to act as the middleman. Some brokers are individuals that help others invest, but most of them are financial institutions that serve as the link between you and the markets you want to trade on.

Besides providing access to markets, brokers also offer all the tools, graphs, and insights you need to trade efficiently. That’s why it’s always recommended that you use an online broker when trading.

There are countless ways to learn more about trading. Traditionally, people learned how to trade by having a more experienced mentor while studying the art of trading through books.

Today, you have an unlimited resource of information online, meaning you can learn how to trade by reading online guides, blogs, and watch instructional videos and webinars. Furthermore, there are trading courses that you can take if you want to learn trading from others.

All the top brokers offer educational material and we think this is the best place to get started, ie. find a broker you like and go through all of their educational material. You can also opt to use a broker with a copy trading platform and social media features since they allow you to share skills and questions with other traders.

No, trading cannot be considered easy to learn. In fact, learning how to trade is a big undertaking that often takes years before the trader in question reaches his or her goals.

As with most things, certain people find it easier to trade than others, but trading is never easy. Also, please keep in mind that a majority of online traders end up losing money in the long run.

No matter what, there will always be risks involved in trading. Some of these risks are constant and cannot be avoided, although they can be limited with practice and knowledge. We’re talking about the risk of losing the funds that you invest.

What’s more, some risks can and should be avoided, such as the risk of being ripped off by your broker. To ensure that this never happens, you should ONLY use regulated brokers that have a brokerage license in the jurisdiction where you reside. For example, UK traders should only use brokers regulated by the Financial Conduct Authority (FCA)

Yes, generally speaking, you’re obligated to pay taxes on all the profits you make from trading. This is the same across most of the world, regardless of whether you reside in the UK, Sweden, or Australia.

As a UK trader, there is one exception to this rule and that is spread betting. You see, in the UK, spread betting is considered betting and not trading. And betting is tax-free in the UK. Therefore, you can use one of our recommended spread betting brokers and avoid paying taxes on all your trading.

There is actually quite a lot that you need to know before you start trading. Firstly, you need to know which market you want to trade on since this will affect your choice of a broker as well as the strategies you use. For instance, stockbrokers and stock trading are vastly different from trading forex CFDs with an online broker.

You should also learn the basics of trading before you venture out on any market. To do this, you need to study trading by using our trading guides and the countless trading resources that are available online and in books.

Then there are basic safety measures that you have to understand and apply when trading, such as using risk management, only relying on regulated brokers, etc.

Our point is that trading is difficult and potentially risky, so make sure you feel comfortable before you sign up with a broker and start trading.

Yes, you can get rich from trading. You see, there is no cap on how much profit you can make, and as long as you have a budget to support it, you can trade for as much money as you’d like.

Today, there are tens of thousands of day traders all over the world that make an impressive amount just from trading.

Just be aware that getting rich on trading is not easy and it is not common, even for most traders that know what they’re doing. Therefore, you’re goal should never be to become rich from trading, but rather look at it as a fun pastime that could potentially bring in extra income and, if you’re lucky and dedicated enough, replace your day job at some point.

No, you cannot trade without money. In order to make a profit from trading, you have to buy a derivative or an instrument and risk losing the funds you invest. There are, however, demo accounts that allow you to trade with virtual funds and without risk. These accounts are created to give you an opportunity to test a broker before you deposit funds and to help you practice and develop strategies before you risk your own money.

To answer the question: you can trade without money if you use a demo account, although you will not be able to make a profit in real money unless you deposit and risk your own funds.