Many people, understandably, are focused on improving their financial situation, and if that’s your goal, perhaps learning how to make a full-time income with Trading 212 as a stock trader could be a helpful step. If so, you’re in the right place.
I will take you through every step and information necessary to start making money as a stock trader on Trading 212.
The platform is a famous online brokerage that provides various interesting products such as CFD, Invest, and ISA. The platform has many registered European users–precisely over 1.4 million registered traders in the European Union.
From research, I discovered that Trading 212 is a leader in online brokerages. By the way, we will explore everything necessary to understand the market and how to start earning income on the platform.
What are the Primary Sources of Income for Trading 212?
For stocktraders who may want to know the primary sources of Trading 212 income, I must show them to you. Here are the basic sources of income for the platform:
- Profits from spreads.
- Stock lending.
- Overnight and weekend fees.
- Conversion fees.
If you are wondering how the company generates basic income for continuity, these sources of income are the strengths behind the scenes.
Essential Information to Understand About Trading 212
- Trading 212 earns money through spreads, stock lending, weekend fees, and overnight, including conversion fees.
- The Invest product provides Commission-free trading on stocks and ETFs.
- You can trade on assets such as stocks, forex, commodities, and indices with CFD.
- The ISA account offers tax-sheltered investing in stocks and ETFs without administration.
- The company also makes money through stock lending and charges fees for holding CFD positions open and currency conversion.
With the information about how Trading 212 makes money, it is enough to give you some confidence to start trading. Now, let’s begin the main business of the article.
How to Make Money with Trading 212 as a Stock Trader.
Making money on Trading 212 is not a get-rich-quick scheme but with the right knowledge and approach, you can earn money to live off. Here are some tips for earning full-time income trading on the platform:
1. Develop Your Strategy or Plan and Stay Focused
Start by making an informed decision on the amount of money you can risk a day and the amount of money you would like to make.
2. Be Decisive About Your Trades
While the trading is in progress, a change of mind may come up. If you did not make a decisive conclusion before the trade, you may end up stopping it.
However, in the end, you will find out that you could have made lots of money. Therefore, to make money on the platform, you must be decisive from the beginning.
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- How to Start Trading Stocks with as Little as $100
- The 7 Best Stock Trading Apps for New Investors
- How to Read Stock Charts for Basic Technical Analysis: A Beginner’s Guide
3. Trade with the Amount You Can Afford to Lose
The reason why most people get disappointed after losing their money in a trade is because they didn’t prepare their minds to lose it. As a Trader on Trading 212, have a mindset of trading with only the amount of money you can afford to risk.
For instance, if you can risk losing £10,000, trade with it, otherwise, use a smaller amount you can simply look at and say, anyway, it is an extra amount.
4. Master the Use of Stop-Loss
Mastering the stop-loss technique will help protect your money in case the trading goes the wrong way. What that means is that this technique ensures that your loss becomes minimal when anything goes wrong. The stop-loss can be twice the Volatility Index (VIX).
Don’t worry, you will understand the meaning of stop-loss before the end of the article. Keep reading, it is essential to understand what it means.
5. Don’t Move the Stop-Loss
Sometimes it can be tempting to want to move your stop-loss, but don’t do that. No matter how the trading is going, being decisive to the end is a golden rule. Let whatever wants to happen after the first stop loss happen. It feels better than moving it.
6. Strive to Earn More Profit
At a point, when you now have plenty of money in your trading account, a temptation will trigger you to take out profit too early.
This act can hinder you from making more profit. Instead of closing a trade too early because it is going wrong, hold it a little more.
Since you will apply the stop-loss, that means, there is no need to be afraid of losing all your money, the loss for sure will be minimal. And if the same trade ends up bouncing back to make you more profit than expected, you can celebrate.
The solution is to decide from the beginning how much you are willing to lose before starting the trade. Keep to your decision to guide you through the entire experience.
6. Learn How to Take a Break
Some traders make the mistake of continuing to trade even when they have lost several times; instead, take a break after three stop losses in a row.
7. Master Your Emotions
While trading, emotions play a huge role in deciding your fate at the end of a trade. For you to earn a steady income on Trading 212 as a stock trader, master your emotions.
For example, remain calm even when an indicator is rising. Don’t let your pressure get so high that you suddenly change your mind.
A great trader is not moved by the behavior of the indicator because he has made up his mind for whatever may happen while the trade is in progress.
However, feeling good about your trade is okay, just don’t allow your emotions to hurt you in the end.
8. Know When to Stop
It feels cool when winning the trade, but it is essential not to be greedy. Once you have won enough for the day, learn to pause for another day.
Decide the amount of points you intend to win per day, once you hit your target, stop trading for another day. For example, you can set your limits to 500 points a day, but it’s not a law.
9. Do Not Rely on Demo Account
Demo accounts may be cool for testing or rehearsing how to trade but when it comes to real trade, the demo accounts may not be that useful.
In other words, don’t allow the demo account to get you carried away that you failed to consider the amount you can risk for a trade.
Also, a demo account should not make you feel too confident that you no longer consider the stop loss that protects your money when you lose.
10. Learn from Previous Trades
Anytime you trade on Trading 212 as a stock broker, there is always an opportunity to improve.
Think about what you should have done earlier, then learn from your mistake. Re-strategize and learn how to trade better to earn more money on the platform.
When you trade again, you will have a better chance to make profits, unlike the last time.
11. The Trade is Not Completely Predictable
Predicting Trade 212 can be disastrous, I advise you not to try it. The past performance does not indicate the future of the trade. According to an expert in the game for many years, the market behaves in a cycleway. I prefer a person hitting stop-loss to control the trade.
Principles of Trading on Trading 212
This principle applies to any form of trading, particularly on Trading 212, it is essential to decide the amount of money you are willing to spend on a trade per day.
For instance, you can make it easier for yourself by deciding the number of points you wish to reach on a day.
It will guide your steps and protect your money during trading. When you select a fixed number of points, let’s say you choose a maximum of 100 points in profits per day, then put an amount like £350 per point.
Then make your stop loss be twice the VIX ( Stop loss can be 36 and the VIX should 18). Doing so can help you control the volatility.
Depending on your salary, you can also understand the principle this way: let’s say you are making £40k per month, you may want to direct it towards how much you wish to make a day. If I were you, I would rather try to make around £150, which means, I would target between 80 to 100 points a day.
In that case, first thing:
Bet £2 per point, this is advice from an expert. After that, make sure your stop is 33 points away. That means, in the end, you’re risking £66 loss if anything goes wrong. If the game favors you, then you are making £99 to make around £198. Once you make your targeted money, stop trading for that day.
The expert also used another example, he said, that if the trading goes wrong, you are losing £66. To regain your loss, ensure the second trade is 50% bigger than the first, so put £3 per point and maintain the same stop at 33.
At this time, you’re risking a potential loss of £99 but the profit awaiting is £297, when you remove the initial loss of £66, you get a £231 balance. If the trade goes wrong, press stop, but now you are minus £99 and the initial £66, all together, you lose £165.
Let’s say you add another trade, then you put an amount two times bigger than the first trade amount. That is you are putting £4 per point. Your stop should remain 33, which means, you will have a potential loss of £132 and a profit of £396.
Observing all the trades so far, if it hits a profit, you will make £231 on that day. Even if you lost twice, it’s still over what you intended to make. However, if it hits the stop, you have lost £267.
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Conclusion
Making a full-time income with Trading 212 demands careful calculations, knowledge, emotional control, and decisiveness. Lacking the virtues above may hinder your earning capacity on the platform.
Also, to win consequently with the Trading company, you must learn from professionals or experts who have been in the game for years.
Reading this article and applying my advice can also help you make informed decisions before putting your money in the Trading 212 market.
