FAQ – frequently asked questions
There are three main reasons for this:
1. The sale offers me another source of income, which is not dependent on market phases.
2. The development of my trading systems is very time-consuming. The sale ensures a direct remuneration of this time.
3. I believe that my products can help many traders. Especially in a market where a lot of false promises and rip-off products are sold.
From my point of view, this figure is very likely correct. Unfortunately. I think, there are various reasons for this:
Getting started in the trading business is too easy. If 100 people started as pilots tomorrow, there will probably only be one or the other successful landing. In order to start trading, no training or anything similar has to be completed.
Another reason is certainly the mostly wrong expectations. As soon as you realize that trading is a bit more demanding and difficult, you give up.
Lots of “trading coaches” who don’t trade themselves and rip off beginners with false promises.
Insufficient start-up capital, which means that the risk is too high. Capital is lost with a few trades.
However, this fact should not deter anyone from starting trading. In order to be successful, however, one should have the right expectations and the necessary perseverance.
Basically, this question is answered quite quickly: a broker and a trading platform.
If you want to do algorithmic trading, you also need a trading system and a server.
I trade with Darwinex and JFD Bank. Since I use these brokers myself, I can also recommend them. I do not have a partner/affiliate program with any of the brokers.
No. However, a demo account still fulfills an important task.
In my opinion, a demo account should only be used to test the platform/trading system. This means that you try out all the technical functions of a trading platform. Which order types are there, how does a stop-loss/take-profit work, etc.? If one wants to trade with a fully automated system, the correct functioning of the system should be ensured in a demo account. Does the system do exactly what I expect?
If you trade manually and you are familiar with the platform, you should switch directly to a real account. In doing so, a very small amount of capital should be risked at first. Manual trading in a demo account is not comparable to trading in a real money account. Therefore, it makes little sense to trade profitably in the demo account for half a year.
In my opinion, everyone who actively trades should earn more than 8% per year on average. If this value is not reached, the question arises whether it would not be more sensible to simply invest your money in shares…
If you want to become rich overnight with trading, you should better go to the casino with your money. Trading should not be a game of chance, but statistics.
I think it is always better to invest your money in yourself or your own business. To make a million from a 1000€ account is possible, but very unlikely. The bigger the trading capital, the easier it is to live on it.
By trading with external capital it is quite realistic to live from trading.
No. Trading apps should at most be used for a quick look at the account. I strongly advise against trading via smartphone. Taking a quick trade on the go has nothing to do with professional trading. However, if you are only trading as a leisure activity, there is nothing to be said against using applications on your smartphone.
For fully automated trading, no trading apps are needed in any case.
Over the years I have had live accounts with many different brokers. Here are a few points that can speak for a serious/good broker:
1. no aggressive advertising. If a broker advertises, for example, with a soccer club or with very tempting “gifts” when opening an account, this is to be considered a negative point.
2. no market maker. The broker should not trade against its own client. However, this is the case with many CFD brokers. This of course creates a conflict of interest which is detrimental to the trader’s performance.
3. transparency. It is very good if a broker offers a post-trade report. In such a report you can see exactly who took the opposite side for each trade.
4. regulated. The broker should be regulated by BaFin or FCA if possible. Registration with the respective financial supervisory authority has nothing to do with it! If a broker is based in Cyprus, this is usually due to tax advantages.
5. trading costs. It is better if a broker always charges commissions in addition to the spread. If no commissions are charged, they are “hidden” in the spread or a worse execution (slippage). All fees (including swap costs) should be clear and easy to see. In addition, positive slippage should also be allowed to occur.
If you trade CFDs, MetaTrade is certainly a very good platform. A big advantage of MetaTrader is that it is very widely used. This makes it easy for beginners to find the right answer to questions etc.
However, if you mainly want to trade futures, it is advisable to switch to a platform like Multicharts or Traderworkstation.
The following costs must be taken into account when trading CFDs:
– Spread: The distance between the buy and sell price.
– Commission: fee for the broker, is usually charged per trade
– Swap: Fee or credit if a trade stays open overnight.
– Slippage: Deviation from the actually desired price. Can be negative or positive.
It depends on the strategy or the holding period of the trades. If you hold positions for several days or weeks, the spread and the commission are negligible. It is important to trade with a broker with low swap rates.
If you open and close positions within one day, a low spread and low commissions are very important. Many beginners often underestimate what a big impact the fees have on the performance. For example, with a high spread/fees and a frequently traded intraday strategy, up to 30% per year must be earned to get out to +/- 0. This is not possible in the long run and therefore, even though the strategy may be profitable, the trader still loses money.