Trend Trading - Online Trading Strategies

The current health crisis is changing the way we operate and our lives. As proof, COVID19 has completely damaged global economies and markets are fluctuating again. According to the OECD (Organization for Economic Co-operation and Development), the current crisis has caused an economic recession never seen before. It is already called "the crisis of the century".

An unparalleled recession

Since the onset of the health crisis in December 2019, economic authorities have continued to warn states that a large-scale economic recession would soon occur. Due to the combination of a shock of supply and demand, in particular for certain sectors, the economic and social costs will be very important in the months to come, both in terms of jobs and the well-being of the people. populations.

Still, according to the OECD, it is, in particular, the European countries that will pay the high price for the recession with historic falls in GDP for Italy (-11.3%), Spain (-11.1%), and France (-11.4%). Moreover, the other countries of the world have not escaped the problem with an unprecedented recession in India or even in the United States.

The unemployment crisis is also one of the major problems of this crisis with an increase of 4% in the United Kingdom, for example. Around the world, the shutdown due to containment has wiped out thousands of businesses and prompted the largest companies to issue social plans so as not to file for bankruptcy. The population, therefore, turned to other sources of money, such as trading.

Online trading as a new source of income

Trading is an English word commonly used in French to refer to the exchanges and operations of buying and selling carried out in the financial markets. With the rise of the economic crisis, the markets fluctuate and allow you to get rich quickly (but also to lose everything).

What is an online trader?

Concretely, an online trader is a person who places orders to buy or sell shares on the stock market to make money. Thanks to the democratization of the Internet, online trading services have emerged. Their plus point is very beneficial: you don't have to be a professional trader to trade.

Where to start investing?

The first thing to do is to choose what you want to do: think carefully about your investments, how you are going to invest them and how much you estimate your return on investments. Also, set a realistic goal early on and don't be discouraged, sometimes trading can play tricks.

Nowadays many sites allow you to trade online very quickly and easily. However, scams do exist and are very vigilant when you start your activity. Make sure you choose your trading site carefully before you get started.

Trade EURO STOXX 50

If you are not one of the great specialists in economics, you have certainly never heard of this name. What is EURO STOXX 50?

First of all, this title is an index, used to measure the current situation of the European economy. Like the CAC 40 in France, the EURO STOXX 50 takes into account the evolution of the markets around 50 large companies in Europe. Also, these 50 companies alone represent more than 60% of the total capital of Europe or more than the majority of public shares.

Factors that influence the value of the index

This index is the result of a calculation around several factors. When these factors fluctuate, they cause stock prices to go down or up. This is why, as a next trader, or as an informed, you must constantly follow the evolution of the CAC 40 and all the other indices.

The main factors are:

• The economic indicators of the selected companies,
• political and economic events taking place in the euro area,
• movements in euro exchange rates
• and the pressure of the exceptional policy of the United States in the event of a historic decision.
• When you are going to start trading in any market, you will need to take into account a lot of factors that can change from minute to minute.

A very advantageous market

To start trading, you must first know the advantages of the market you are going to try to conquer. The EURO STOXX 50 has many advantages.

• First, it is made up of stocks with a large volume of liquidity.
• The companies included in this index are part of a stable economy.
• The vast majority of companies belong to the industrial sector, a sector in full development.

Trade CFDs on the European market

Contracts for difference, more commonly known as CFDs, are contracts that involve differences in the prices of assets. In short, CFD trading allows you to trade on price movements for buying and selling and bet on the rise or fall of an asset.

In short, the main concept is opening a CFD when the market is about to go up or down to make money. On the EURO STOXX 50, you can benefit from many advantages, such as extending your portfolio across the whole of Europe (if the regulations allow it) or even reducing your financial risks linked to price changes in the future.

Online trading carries risks

Be careful, however, if you decide to start trading, take this paragraph into account: online trading can allow you to make a lot of money, that's for sure, but it can also cause you to lose it. Trading CFDs, for example, is a practice to be aware of before embarking on it because 83% of investors lose money when trading in CFDs.

This is why we advise you to inform yourself well before you start trading. Your success depends mainly on the knowledge you have.