Take the case of having a discreet capital in your hands (and for example 1,000 euros to invest) but at the same time feeling rather indecisive about how to use it. Investing it on the stock market today is certainly a good idea, but you need to know how to start with the right way and taking advantage of the possibilities offered by the market today.
Until a recent past it was not possible to invest in the stock market directly online; anyone who wanted to buy for example shares, or foreign currencies (forex currencies, ed. ) was forced to do so exclusively in the bank or commissioning a financial broker who would do stock exchange transactions for him.
But to do all this, much more capital was needed… more than 1,000 euros! At least 20 times as many.
However, things have changed a few years ago. Today it is possible to invest in the stock market even starting from much smaller amounts, even lower than 1,000 euros, which is precisely the budget in your possession.
The possible ways to decide how to invest an amount as important as € 1,000 on the stock exchange can be manifold, so it is normal to ask what is the first step to do and possibly try to understand how to direct subsequent movements in order to increase one’s capital to out of proportion and perhaps to make money from the initial capital instead of losing it all.
How to invest 1,000 euros: it is possible with the online exchange
Today there are many valid methods and strategies to allow you to use your 1000 € of capital in the best way.
Here then is that in the remainder of our paper we want to show you the most obvious and right decisions to take in order not to waste your time and your money, to make sure that your stock market activity gives you enormous satisfactions, but above all to avoid commit a series of errors that lead beginners to invest in the stock market to lose their capital.
In fact, we are certain that any trader who is not well informed and unable to invest in the right way would fail to trade on the stock exchange even if he had € 10,000 at his disposal.
Now I am sure you are wondering: how is this possible in practice? You can do it through secure, reliable and regular investing platforms. On Investireinborsa.org we have only selected 4 of them and do you know why? Because we preferred to focus your attention only on the really best ones.
You can find them in the table below – the most interesting thing about this is that you can try them for free and see how you are. This is possible by means of demo accounts (virtual accounts) which they make available to their customers.
Invest 1,000 euros with the rules of money management
To reap the best results from the investment of a conspicuous capital like that of 1000 € and to put in place the best ratio between losses and profits it is necessary to follow the main rules of money management, or the science that explains the most intelligent ways to exploit their own money in the investment sector.
What traders (small investors in online trading, ed ) don’t understand in the first place is the need not to lose their capital and to preserve it from the risk of uncontrolled losses and outflows.
So here is the first anticipation of the details that we will give you later: the golden rule of online trading is whether you choose to invest through social trading on the best platform or whether you choose to invest with the contract system for difference, it requires you to always use a very small, almost insignificant part of your trading capital, when you operate in the financial markets.
In this way, if a loss should occur, it would be insignificant and not very worrying, whereas if you make a profit you could add it to your “piggy bank” which will be used to increase future profits and become a successful trader.
In this activity, ants win, not sharks. Forget what you’ve learned so far about online trading, forget about the beautiful and funny movies like ” The Wolf of Wall Street ” that you’ve almost certainly seen and that has fascinated you.
Here to learn how to play the part of the shark you have to sweat and work like the ant that skilfully puts aside its small gains to overcome the winter, but already has the strength to lift up to 100 times its weight and therefore remember: never invest more than 5% of the total capital at your disposal in a trading transaction.
This is how the ant behaves when it intends to become a shark, at the top of the food chain.
Invest € 1,000 on the stock exchange: we answer the main questions
Invest starting from a capital of 1,000 euros on the stock exchange and do it through CFDs – contracts for difference and social trading: these two systems are the only advisable if you intend to invest seriously in a stock market activity, they are substantially different, but both can give you enormous satisfaction by operating on the financial markets.
Now we will give you practical examples of how to share your hypothetical capital of € 1000 to make profits both through eToro’s social trading and through contracts for difference ( on the 24option platform or on the other two recommended that you find in the table indicated above) on ).
First we will answer the main questions that generally revolve around online stock market investments then you will be the one to choose which of the two tools to use, remember only to do it with platforms up to the level (as already mentioned above, Markets.com and Trade.com) of their task and that they really know how to guide you towards important horizons of income.
How to choose when to operate?
Let’s say right away that having “only” 20 trading transactions available, the first thing to do will be to select the best moments to trade well, you have to choose well because 20 transactions are not very many and you have to try to close them positively at least 15 out of 20 to do so as not to end up in red and indeed to bring your capital to grow already after the first week or the first 15 days of trading operations.
The best thing to do is to select only the safest and most reliable trading sinals, letting go of those market situations that are too nebulous or difficult to interpret that would greatly reduce the chances of making a profit for you.
So if you have already complied with the 5% rule for operation, in order to make a selection of the best trading signals you have to rely on market rules and laws and in particular on the analysis of the same through technical indicators.
When their use is framed within a precise strategy that also tells you, the time frame to follow, the deadline to select and the perfect moments to enter the market, then it is normal that you will be able to take home safely the 15 successful operations we had originally planned.
By using a strategy, you can guarantee ample margins of success in every single transaction you make. Using the best trading strategies you have the possibility to identify only certain signals that you must however judge as objectively as possible without letting yourself be carried away by the emotions and the greed to obtain high earnings immediately.
You have to keep yourself cool and rational and this will allow you to judge whether to enter the market or not, the signals selected in this way will allow you to have over 80% chances of success for the operations you are undertaking and then at the end of 20 total operations you will certainly have a positive balance, even by far.
In which markets is it best to invest?
It is really very difficult to determine on which markets it is best to invest when trading online on the stock exchange. The signals you choose to exploit (here to discover a valid service) must be generated from markets that you know and that you have learned to observe.
The first thing you could do for example is to go and get the economic calendar to check if important news is provided that can strongly influence the market trend including the one in which you have decided to operate.
If there is news, make sure you know what the movements that will generate in advance will be, so you will know immediately which choices to make without indecision.
Speaking of news and tools. .. given the topic, this package could do just for you.
We advise you to choose rather volatile markets and also in a clear and readable trend. Selecting markets that are not too lively and lateral will not allow you to make the best decisions and to analyze specific markets.
At the same time do not choose excessively volatile titles because this will certainly cause sudden price movements that you do not expect.
For example, you might think about choosing crude oil assets or even the most important currencies traded on the forex market that always offer great interesting market insights. Then yes you can get the best out of your € 1000 capital.
Don’t overdo it though. Remember to always be moderate even in the number of markets and situations you choose to keep an eye on for your operations and for your investment strategies.
Don’t limit yourself to just one market, otherwise you risk losing the principle of diversification of investments, but in the same way don’t exaggerate in the choice of a vast number of different assets.
A balanced choice regards a maximum of 3 – 4 assets to be kept under close observation, so that you can get in an average of ten signals to evaluate whether to consider or not.
In the end you could choose to do up to 2 to 3 operations a day once you have skimmed off the occasions that you feel are the least reliable, so don’t overdo it.
Invest € 1000 on the exchange with CFD trading
We have established that your starting budget to be dedicated on the stock exchange is 1,000 euros. How to act through contracts for difference on a secure platform like 24option?
After opening a demo account from here, complete all the registration part, completing the profile.
Then you can proceed to deposit the 1,000 euros using one of the many methods available (we always recommend prepaid cards as postepay).
Later you will find the paragraph that explains in detail how to act.
To be “employed” in your investment will be the entire budget, so all 1,000 euros. This means that potentially, according to the first general rule of financial markets, the entire budget is at risk. What are the consequences?
The first is positive: in the case of profits, you can make a lot of money thanks to the mechanism of leverage because it is as if you are always using your entire investment potential.
On the other hand, however, you have to pay close attention to the second consequence of all this: if it starts to lose, it is your entire capital that is at risk in a single trading operation and this could be a big problem but fortunately we already have in store for you an easy and direct solution that you can adopt: the stop system.
Leverage (leverage) allows you to multiply the budget invested in the position by “x times”.
How to do it in practice
Once you enter the market, you have two paths:
- Invest the entire budget on one position (recommended only for the most experienced);
- Invest only 5% of your budget on each position, then only 50 euros.
If you are fearless and you like the risk (highly risky profile for investment in the stock market) and therefore invest everything in a single operation, to establish the maximum level of your loss based on the general rule of money management in symbiosis with rule of 5% of maximum bearable risk, to do so you just have to give an order to your trading platform that establishes an automatic exit from the operation in progress that you have undertaken.
Once you have selected the Stop Loss, this is the technical name of this specific market order, you can sleep peacefully and if you invest using a trading strategy as we explained above, the chances that the stop loss level will be reached and that your position close down at a loss are minimal and on the contrary you will see your profits grow.
If instead you have a much more prudent approach (which I highly recommend), then you can also avoid using the stop loss – in the event of a loss-making transaction, you will still have met the golden rule of tolerable loss (5% of the total).
Note: even in this last case no one forbids you to use the stop loss indeed, it is always good to use it, setting a maximum loss of 50% on it – in our case 25 euros.
Finally, it also sets the take profit option to close the position automatically if it reaches a certain profit value.
Invest 1,000 euros with social trading
Social trading has only been born for a few years and, particularly in Italy, it is having a huge boom just now; this is because the best recommended platform for social trading (eToro) has developed an excellent service from many points of view so as to be recommended even by industry experts of international caliber.
Social trading, or social trading, is a trading system that makes the investment performance of all active investors public (within the community), making rankings based on the best performance.
Anyone can start on eToro’s social trading – what matters is to first understand how the platform works, and for this you have the possibility to use the free demo account with a virtual balance of 100,000 euros.
Using the search on the best traders you have the possibility to select, through the filters, to select the ones that are most suitable for you: in fact there is the opportunity to set filters by virtue of performance for a specific period of time, the risk appetite of the investor, the preferred markets (forex, raw materials, stocks etc).
The advice of Investireinborsa.org is to register on the platform, complete the registration and start using the free demo in order to get familiar with the platform; you can also make your payment of 1,000 euros of your capital, but carry out your first trading operation only when you really feel ready.
The money management rule obviously also applies to social trading: we invite you to open positions (trades) NEVER above 50 euros.
Our planning to invest € 1000 is very effective and the basis of many strategies to make big money both with social trading and with CFDs, the traders who lose do not respect these rules and end up making a painful end without the beak of a penny in your pocket, so just remember to follow these rules and the money will arrive by itself.