Published On: Sun, Sep 4th, 2016

Is It Possible to Trade Online Without Risking a lot?

Trading online inherently has its own risks however now more than ever you are able to trade without risking a lot.

This is because there are a number of different features available for you to take advantage of to reduce risk of major losses and increase your chance of earning profit.

No Deposit Bonuses

One of the easiest ways for you to reduce risk when trading is through the use of no deposit bonuses.

Fortunately no deposit bonuses are offered by both Forex Brokers and Binary Options Brokers. Therefore no matter which you decide to trade, there are no deposit bonuses available for you to take advantage of.

online trading

How a no deposit bonus works is that you get funds to start trading without using any of your own money.

Brokers use this method to attract new clients however there are a number of scams out there claiming to offer no deposit bonuses.

To find out more about what to look for when considering a no deposit bonus, read our No Deposit Bonus Guide. (hyperlink to no deposit bonus guide.)

Forex No Deposit Bonuses are commonly known but binary options no deposit bonuses offer a number of advantages for traders as well. Check out the best binary options no deposit bonuses here.

Risk Management

Besides No Deposit Bonuses, there are two other well known methods of risk management and they are:

  • Diversification
  • Asset Allocation

These two methods allow you to reduce the risk of major negative pitfalls concerning your investments which is quite comforting given that the market has its cycles and even though it could be up today, it could easily be down tomorrow.

Here are how these two risk management methods work.

Asset allocation is when you don’t as the saying goes, “put all your eggs in one basket.” Meaning, you spread your money across different assets; say investing a percentage in forex, another in stocks and another in commodities.

What this does is allow these assets to balance each other out. If forex performs badly then the gains from stocks and commodities can make up for it and vice versa.

This is reassuring as no one can completely predict how the market will go with 100% accuracy and so you need to take steps to reduce your risk of losing it all.

The other method is diversification. How this method works is that you invest across different industries in the same asset category. So for example if you’re investing in stocks then you invest stocks in more than one industry. By investing in several industries within that asset category, you add another layer of protection to your portfolio.

Trading naturally comes with its own financial risks.

But without any risk there is no reward and often times the reward is far more satisfying if there’s a higher risk. But many people do not want to take unnecessary risks and that’s understandable.

As said before, now more than ever, trading can be done with limited risks thus reducing your headache and increasing your profits.

Utilize the methods mentioned above and you’ll see an improvement in your earnings and have a much better online trading experience.