Home Community Insights Why is 2023 the year to finally start online trading?

Why is 2023 the year to finally start online trading?

Why is 2023 the year to finally start online trading?

In the financial world, there are two types of investors: passive, and active. Passive investors are trying to find assets that have potential to grow in price later. On the downside, when markets are falling, passive investors suffer.

Active investors, also known as market speculators, love market crashes and price hikes. When the world’s economies suffer, speculators make money. The same has happened during the 2007-2008 financial crises and the same is happening today.

The years prior to 2023 have been difficult for the world’s economies. The pandemic has slowed down production of goods and services. The quality of medical care, education and other services has declined. Governments took out loans from banks and printed lots of money. As a result, prices on stocks, crypto and other assets have skyrocketed.

2022 Russian invasion of Ukraine has also negatively impacted the state of the global economy. Prices on food, energy and other goods and services have increased dramatically. The dramatic increase in the consumer price index has forced central banks to increase interest rates. When inflation rises, central banks increase interest rates to limit printing money. As a result, regular people take fewer loans from banks, there’s less money in circulation and therefore, the money gains higher value. However, this hurts the economy, as less money spent means less income for the companies. Businesses are true wealth creators. Money is not wealth, goods and services are real wealth.

At the end of 2022, high inflation, high interest rates globally, and political and economic difficulties have negatively impacted the financial markets. The stock market, Euro, Great British Pound, Swiss Franc and other major currencies, as well as the crypto market have experienced increased volatility and price declines. However, while others see risks and difficulties, traders see great trading opportunities.

2023 will be a great year for both active and passive investors. Active investors love high volatility and increased trading opportunities. And Passive investors are looking for assets that cost less than their real value. In 2023, lots of assets will be devalued to the point where they become attractive for long term investors.

Increased volatility and more trading opportunities

Traders make money when there’s good liquidity and markets are moving. 2023 will be a highly volatile year, as a result, there will be plenty of trading opportunities for the speculators. High inflation and increased interest rates are likely to remain present throughout the year. And there’s also a chance of global recession. Recession is a decrease in economic activity. And usually, high inflation is followed by recession. Recession can cause further declines in stock prices.

How to start trading?

Open a demo account

It’s worth noting that in case you have no experience in trading, it’s best to open a demo account and  try trading out on a demo account first. The accounts are very similar to live trading conditions. The only difference is that real money is not under risk. Demo accounts help novice traders learn how to use trading platforms, get familiar with broker policies, learn how to use indicators and develop trading strategies. The accounts are not only for beginners, but professional traders often demo trade to improve their trading strategies or build new ones from the ground up.

Learn about the markets you wish to speculate or invest in

Each market has its features. Forex market is more cyclical as one currency is always valued in relation to other currencies. And currencies are backed by economies, central banks and governments. On the other hand, company stock prices can grow dramatically or fall to zero. In addition, each trading instrument is different. There are major, minor and exotic currency pairs. Currencies differ in level of liquidity, spreads, volume and volatility, etc. And therefore, it’s critical to learn about things that have an impact on your trading instruments’ valuation to make predictions on future prices.

Develop a trading strategy that fits your personality

There are a million ways to make money in the markets. However, all of them are difficult to find as there’s an increased competition. Some traders day trade to avoid swaps, some swing trade to limit market noise, and others invest long or medium term. There are scalpers, high frequency traders, position traders, algorithmic traders, etc. In case you are a quick thinker and have fast hands, perhaps day trading, high frequency trading or news trading is for you. If you prefer more planning and research, position and swing trading might be a better choice. It’s very hard to tell unless you start trading yourself. And as already mentioned, demo trading can greatly help you find the answers. In addition, be noted that not only can you demo trade, you can also use backtesting algorithms or programmes for trading strategy development.

Develop accountability

The last part is to be accountable for your trades. Trading journals and trading communities can greatly help in this regard. Trading journal can have multiple uses. It can help you review your progress, find your strengths and weaknesses, and also make you more accountable. When a trader knows that he or she will be saving progress in the journal at the end of the season, it’s more likely that the decisions will be more calculated.

Let’s sum up

To sum everything up, 2023 will be a great year for both active and passive investors. Passive investors buy when markets are down and sell when they are sky-high. As for the short term speculators, they love increased volatility and can benefit from both bull and bear markets by speculating on CFD prices. 2023 will be a highly volatile and challenging year for the global economies. As a result, traders will find lots of opportunities to make money. In case you don’t have experience, it’s best to start with opening a demo account. A demo account will help you get familiar with the platform, instruments and broker policies without the risk of losing money. For profitable trading, it’s critical to:

  • Learn about the markets you wish to speculate or invest in
  • Develop a trading strategy that fits your personality
  • Develop accountability

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