Online Trading FAQ: Frequently Asked Questions


What is Online Trading?

The Online Trading market (also referred to as the currency market) operates as a global decentralized market. It principally trades currencies, yet other assets too and the Online Trading market makes a daily turnover of approximately $5 trillion.

What is an Asset?

An asset is a financial instrument or an economic resource that can be traded on and converted into cash. To trade, investors need to choose an asset from currency-pairs as well as stocks, and commodities. Log in to your account to view a full list of all the assets available to trade.

What is a Buy Option?

A Buy option is depicted by an upward arrow and indicates that market price of an asset will move higher.

What is a Sell Option?

A Sell option is depicted by a downward arrow and indicates that market price of an asset will move lower.

What is Strike Price?

The Strike Price is the market price of an underlying asset when you enter a position.

What is a Bearish Market?

A bearish market is a condition whereby market prices of assets fall, encouraging selling. Share prices drop resulting in a downward trend that investors believe in continuing in the long run

What is a Bullish Market?

A bullish market is a condition whereby prices rise, encouraging buying. Bull markets are characterised by optimism, investor confidence and expectations that strong results should continue.

What does Current Price mean?

The current price or market value of an asset is the actual selling price of the economic resource trading on an exchange. In general, the market price of an asset converges to a point where the forces of supply and demand meet. Shocks to either the supply and/or demand side can cause the market price to be re-evaluated.

What are the risks of online trading?

There is risk of loss associated with investing in securities regardless of the method used. New investors need to understand the principles of investing, their own risk tolerance, and their investment goals before venturing into the market. In addition, online investors may want to consider these other risks. High Internet traffic may affect online investors’ ability to access their account or transmit their orders. Online investors should be skeptical of stock advice and tips provided in chat rooms or bulletin boards. Investors should do their own research before acting on these tips. Also, for some online investors, there is a temptation to “overtrade” by trading too frequently or impulsively without considering their investment goals or risk tolerance. Overtrading can effect investment performance, raise trading costs, and complicate your tax situation.

What is Forex?

Forex and ‘FX’ are abbreviated terms used for ‘foreign exchange.’ Foreign exchange or ‘Currency trading’ is the exchange of money from different countries. The value of one country’s currency is constantly changing against the value of another country’s currency. The foreign exchange market operates as the primary exchange system for international business and trade. Forex traders earn money through buying and selling currencies on the foreign exchange market

Which trading features should I look for?

Preferred trading features vary on your status as a trader. For example, beginners will usually find a broker that offers a learning center and automatic signals, whereas a more experienced or advanced trader will most likely prefer a site with a live streaming channel, showing the latest news, as well as an option for hedging and scalping. Trading features also include beneficial spreads, availability of all trading assets such as a high payout ratio, stocks, foreign currency pairs, indices, and commodities, along with educational materials.

What percentage of people really earn money on the FOREX?

10 % make money, and 90% lose money! Why? The 90% who enter the market are driven by emotions such as greed and fear. They lack a sound equity management plan and know very little about the techniques of trading. The fact is they are lacking adequate and proper education for the task at hand.

Why do Professional Traders earn so much money?

Most Professional Traders are part of the 10% earning money. The 10% earning money actually receive the 90% money that is lost . If the 90% are paying the 10%, you can easily figure out that the 10% are being paid quite handsomely.

Is it possible for me to become a successful Professional Trader?

Absolutely! Trading is a profession that most anyone can learn. However, it doesn’t happen over night or in a few weeks. You must go through the same processes of education and mentoring that all professionals go through. Generally, we are becoming conditioned by numerous national ads into believing that trading is simple. If it is that easy why do we hear the horror stories about day traders? Why do 90% of people lose on the FOREX?

Is trading a form of gambling?

All forms of trading and investment can be construed as a form of gambling, although neither are the same as playing the lottery, roulette or betting. Traders seek price fluctuations and investors seek return on investment. Both require a calculated risk that is minimized by knowledge. You are always gambling when you don’t know what you are uneducated, trading emotionally or with a “hot tip”. Calculated risks are taken in all investments. People risk huge sums of money and not every one succeeds. Even when there is a track record of success as in many franchises there is still no guarantee. Their investment becomes a calculated risk. The FOREX market is no different. When you trade not knowing what you are doing, or off a tip, you are gambling. When you trade after you have been educated or mentored by a successful program, or by other successful traders, you are now taking a calculated risk.

If I trade the FOREX, could I lose everything?

No. You can’t lose everything you own. The under-educated will more than likely lose their margin account. The educated will more than likely capture the loser’s margin account money.

Why don’t we hear more about the FOREX?

Reliable sources indicate that about 1.9 trillion dollars of currency is traded daily on the FOREX. The majority of the volume historically is generated by major investors, banks, financial institutions and governments. Thanks to the Internet, more and more people like us are beginning to learn of the opportunities and are getting involved.

What do emotions have to do with trading?

Where money is involved so are emotions. Many people are quite knowledgeable about trading but can’t handle the emotions. Your emotions will be your biggest obstacle to successful trading. Not the techniques. To be a successful trader you cannot trade emotionally. You must trade logically. Our egos drive us to be successful 100% of the time, but in reality no one is successful 100% of the time. Not even the professionals. Successful professional traders clearly understand the market is about logic, not emotions. They trade logically, not emotionally and they are the 10% who trade successfully all the time!

Do people really become full-time traders?

Yes. You have to crawl before you walk. It takes time and discipline. It is just like starting any other business. Apply the right rules, attitude, and diligence and many folks then begin trading full-time.