How to Set up a Brand-new Trading Portfolio
Over the course of the last 20 years or so, the barriers surrounding the world’s financial markets have been eradicated one by one. This is triggered almost unparalleled growth and diversification, with the global forex market alone worth a staggering $1.934 quadrillion! The size of this market doesn’t guarantee success to individual traders, however, as you can only generate income from the financial markets in instances where you’re knowledgeable and have a clearly defined strategy. At the same time, you’ll need to create an increasingly diverse trading portfolio, and one that’s relatively easy to set up. Here’s how you can achieve this challenging goal:
Register with an Online Brokerage
Before you begin to build your portfolio, you need to register with an online brokerage firm that enables you to encompass all of your chosen markets and asset classes in a single user interface.
In this respect, the Oanda platform is one of the very best on the market, as it offers users access to a vast array of financial markets and individual assets.
At the same time, it connects people to a wealth of learning and information tools, which enables traders to bridge the gap between theoretical knowledge and practical experience.
Scale your Trading Portfolio Like a Business
With an online brokerage firm behind you, the next step is to start getting to grips with your portfolio and working out how you intend to scale over it over time.
In this respect, your new portfolio is like a business, and should be grown or diversified over time in line with your knowledge base and the amount of capital that you have to spend.
For example, you may start out by trading forex, capitalising on this market’s unique leverage and margin to optimise profits. You can then reinvest some of this in a complimentary (and most likely non-derivative) asset such as stocks, so long as you understand this market in suitable details.
Use a Demo Account to Hone your Strategy
One of the benefits of using an online brokerage site is that it offers you access to a demo account, which replicates real-time market conditions without requiring you to risk your hard-earned capital.
This type of account can be used for a period of between three and six months, and it offers strategic value as you can experiment with trading new asset classes and hone your skills in a simulated and completely risk-free setting.
Just be sure to use this time wisely; as you may want to experiment with various assets as part of a far-reaching portfolio, as you look to create a plan for managing this capital and optimising returns over a sustained period of time.
This is not to be construed as investment advice. Seek professional guidance prior to investing.