Can You Really Make A Profit By Trading Online?

Since the invention of the internet just a few decades ago, life as we know it has changed in a big way. Today, we do just about everything online. In fact, there are millions of people around the world that make their living in the comfort of their own homes, using nothing more than a computer. As an online entrepreneur in the finance sector myself, I’ve received quite a few emails revolving around a specific way to turn a profit online. These emails have asked if it’s really possible to make a profit trading online. The answer is YES! In fact, there are several online trading vehicles that have proven to be great ways to earn money online. Today, we’ll go over my three favorites.

Momentum Stock Trading

One of the best ways to turn a profit by trading financial assets online is known as momentum stock trading. Essentially, momentum stock trading is a form of day trading that focuses on stocks with incredibly strong upward momentum. In most cases, these are stocks that trade for well under $1 per share, also known as penny stocks. The goal here is to buy the stock at a low price before a catalyst. This catalyst should cause high momentum upward movement. When the stock reaches its peak, the trader sells his shares and collects his profits.

There are several benefits to this type of trading. The first benefit is the amount of money that can be made. After all, when you’re buying stocks at under $1 per share, even pennies of gains could mean big gains for the overall position. There is also benefit in the fact that even if the stock edges downward, you may take a loss, but you won’t lose it all.

However, there is a big of downside to momentum stock trading as well. First and foremost, this takes quite a bit of research. If you’re incorrect about the catalyst and the strong upward momentum never happens, you could end up taking a loss. With that said, if you decide to go this route, make sure to do your research and learn what moves the market.

Binary Options Trading

Binary options trading is another great way to go about making a profit through online trading. Binary options are a derivative investment. This means that the value of the binary option is derived from price movements in an underlying asset. When trading binary options, what you’re essentially doing is making predictions with regard to whether or not the underlying asset will move up or down. If your prediction is correct, you stand to earn up to 80% or more with some brokers.

As with all forms of trading, there are pros and cons that come with binary options. The drawbacks include high risk as a result of short term trades, and the fact that if you are incorrect, you lose the entire investment made during the trade. However, for many, the benefits of incredibly high profit margins and simplicity in making simple up/down predictions far outweigh the negatives.

Forex Trading

Finally, another way to go about making a profit through trading online is forex trading. Forex stands for foreign exchange. So essentially, forex trading is the process of trading currencies. Because currency is the most in-demand asset in the world, we see quite a bit of volatility in the currency market opening several opportunities for a profit on a regular basis.

When it comes to forex trading, there are a few pros and cons that you’ll want to consider. First off, when you win big, you really win big! Forex traders take advantage of leverage which increases their earnings in a big way. However, this leverage can also expose you to tremendous losses. Also, while most trading vehicles come with some risk, because of the incredibly volatile nature of the currency market, forex trading tends to come with much higher risks of loss. So, if you’re going to go this route, make sure to do your research to learn everything you can about the currency market before getting started.

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