Trade stocks, crypto, currencies, indices, with eToro practice account.
An eToro practice account, also known as a demo account, is a valuable tool for anyone interested in trading financial markets.
With a practice account, traders can test out different strategies and gain experience without risking any real money.
In this article, we will explore the benefits of using an eToro practice account, how to set one up, and some tips for making the most out of it.
Benefits of Using a Trading Practice Account
The benefits of using an eToro practice account are numerous.
Firstly, it allows traders to test out different strategies and see how they perform in the market without risking any real money.
This is important because it allows traders to make mistakes and learn from them without incurring any financial loss.
Additionally, a practice account can help traders become more familiar with the eToro platform and its features, such as the different types of orders and charting tools available.
Another benefit of a practice account is that it allows traders to practice their risk management skills.
This is important because risk management is a crucial aspect of trading, and it is essential for traders to be able to manage their risk effectively in order to be successful.
A practice account enables traders to test out different risk management strategies and see how they perform in the market.
To set up an eToro practice account, traders need to create a free account on eToro’s website.
Once the account is created, traders can access the practice account by clicking on the “Practice” button on the top right corner of the eToro trading platform.
The practice account will come with a virtual balance of $100,000, which traders can use to practice trading.
Which Markets Can I Trade with an eToro Demo Account?
An eToro demo account will give you access to trade the following:
Stock market
Crypto market
Commodities market
Currencies
Indices
ETFs
Stock Market: trade stocks such as the SPY, Tesla, Apple, the Nasdaq, and many more.
Crypto Market: trade crypto such as Bitcoin, Ethereum, BNB, Cardano, and more.
Commodities: You can even trade commodities such as Gold, Silver, Oil, and even Wheat!
Trade stocks, crypto, currencies, indices, with eToro practice account.
The number of markets you can trade with the eToro practice account is one of its coolest benefits.
One that many other trading accounts don’t have the capabilities of doing.
Let’s now look at some great tips for trading on a demo account you may find extremely useful.
Tips for Trading on an eToro Demo Account
Trade stocks, crypto, commodities, indices, and more with an eToro Demo Account.
Once the practice account is set up, traders can start experimenting with different strategies and testing out different trades.
It’s important to remember that the practice account is not a simulation and the market conditions, spreads and other parameters are real-time (another benefit).
One important tip for making the most out of an eToro practice account is to keep a trading journal.
This is a record of all the trades that you make, including the reasons why you made them and the outcome.
Keeping a trading journal can help traders identify patterns in their trading and make more informed decisions in the future.
Another tip is to make use of the eToro social trading feature, which allows traders to follow and copy the trades of successful traders.
By following and copying the trades of successful traders, traders can learn from their strategies and gain valuable insights into the market.
Lastly, it’s important to remember that the purpose of a practice account is to practice and gain experience, not to make quick profits.
It’s important to approach trading with a long-term mindset, and not to get discouraged if things don’t go as planned.
A practice account will help you develop not just the skills you need to succeed in any market but also the discipline and grit it takes to win.
Closing Thoughts on eToro Practice Account
How to practice trading stocks, crypto, commodities, and more.
In conclusion, an eToro practice account is a valuable tool for anyone interested in trading financial markets.
It allows traders to test out different strategies and gain experience without risking any real money.
By setting up a practice account, keeping a trading journal, making use of the eToro social trading feature, and approaching trading with a long-term mindset, traders can make the most out of their practice account and become successful traders in the long run.
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Why options trading?
Options trading allows you to make money at will, no matter if the price of a stock is on an upwards or downwards trend.
Differentiating calls vs puts is going to help you identify which strategy will best suit you as a trader.
While some traders use one or the other, many traders also use both strategies in different plays.
Trading options isn’t as risky as most people might initially think it is.
For starters, buying a call or put option means you can only lose what you invest in.
Another pro to trading options is you can earn money every day, or every week if your margin account has less than $25,000.
New options traders will find you do not need a lot of money to begin trading options.
To get started, you’ll need to open an options trading account and you can fund it with a few hundred dollars or less for starters when learning how to trade.
Reason why you shouldn’t limit yourself to a 9-5
Options trading for beginners.
A 9-5 might feel like you have some sense of security, but the reality is a 9-5 is never truly 100% secured.
Learning new skills will allow you to increase your income outside your 9-5 without having to take the risks of entrepreneurship.
Two of my startups failed while I was employed, the third one wasn’t scalable, and finally my first real business has been growing since 2020.
But even then, I knew that I didn’t just want to earn money per project.
I asked myself, “how can I earn money on a regular basis?”
That’s when I began to study options trading before actually committing to making my first trade.
The hardest part for me was taking action after I had digested the knowledge on how to make my first trade.
But let me tell you, once I made my first trade, I got a rush.
Because I wanted to do it for so long and I was finally doing it.
I had a strategy in mind I always thought of using and I finally began putting it to work.
I made gains on my first trade, gains on my second, and lost a little on my third.
But by my sixth trade, I was up 10.57%.
If you’re a long-term investor you’re lucky to see these gains by the end of the year.
Here’s why these gains were so important
If you’re thinking to yourself, what’s so significant about +10%?
Well, you’re missing the macro vision here.
Think about how often you get a raise at work, are you even in a position to get a raise at work?
Imagine you getting paid 10% more one day at work, that be great wouldn’t it be?
Now let’s break down how much 10% is when comparing it to a few different brackets when trading options.
10% gains on $200 is $20 more per day / additional $600 per month
10% gains on $500 is $50 more per day / additional $1,500 per month
And 10% gains on $1,000 is $100 more per day / additional $3,000 per month
Now that’s a lot better, right?
If you are able to make $1 trading options then you can make $10 trading options and $100, and so on.
And while not every trade will be a 10% gain day, some will be bigger days and some less.
This is where strategy and due diligence will play a big part in your success rate.
I break down the differences in this article and make it very easy for beginners to understand how they work.
Call options are bullish bets a stock will go up while put options are a bearish bet a stock will go down.
You will also want to familiarize yourself with the meanings of OTM (out the money), ITM (in the money), and ATM (at the money), also explained in this same article.
And lastly, you will need to use a broker that allows you to trade options.
Webull has to be the best platform to trade options as it has one of the easiest navigation layouts in the game.
NOTE: you will need to open a margin account and not a cash account to trade options with Webull.
If you’re part of the community newsletter, you received an email regarding a new 3-part video options trading series I have coming very soon.
I’ve completed Part 1 and Part 2 already and will be publishing a video on my personal day-trading strategy in August as Part 3.
I show you the basics; how to buy a ‘call’ option and ‘put’ option step-by-step during a real-life trade.
I will wrap up the third video with the trading strategies that I personally use that no one else is talking about.
Some of you caught the clip I posted on my IG story this morning on calls that printed from CEI.
This 3-part video series will be made available in our private community if you’re interested in learning more about trading options.
Here’s what happens when you trade options
Options trading for beginners.
You gain control of your finances
A confidence emerges that was previously dormant
You unlock the ability to multiply your money at will
Something clicks when you realize that you can literally turn money into more money without relying on an employer.
Those of you reading this who already trade options know exactly what I mean.
By the end of my course, most of you will be able to wake up every morning and make a trade that will yield gains.
Technology has had a huge impact on the investing arena.
It has democratized global financial assets trading, opening up a lucrative space to anyone with an internet connection.
The opportunities are limitless, but as with any investment activity, there are also risks involved.
While it is very easy and straightforward to get started with online trading, producing positive results consistently in the market is a very daunting task.
The pressure to perform is ever-present and can be very overwhelming.
However, success in online trading is a worthy pursuit.
Here are some tips to follow to increase your odds of success trading online:
Trading Education
‘An investment in knowledge always pays the best interest’
Benjamin Franklin
Like in any field, gaining education is very important in online trading.
It is also very important to gain the right education because the wrong one can be disastrous.
Education should also be structured: from basics, such as terminologies and market structure, to intermediate and advanced aspects, such as trading strategies, risk management, and trading psychology.
Traders can learn from plenty of sources such as broker websites, trading forums, and other internet resources.
Additionally, there are a huge variety of online sources available that offer insight into specific topics such as the best US Forex brokersand what strategies to use or not use in various situations. With so many resources right at our fingertips, it’s easier than ever for traders to become successful go-getters in the market.
Financial assets are very dynamic, so it is important to continually update and upgrade your knowledge and skills.
Education never stops, especially in the world of online trading.
There will always be plenty of market insights and analysis to keep tabs on, as well as news and events on the Economic Calendar.
Like in any business, having a plan will help guide you to consistent success in online trading.
A trading plan will detail how you will approach your entire online trading activity.
It will include your trading strategy (how you will enter and exit trades in the market), your risk management plan, as well as your trading psychology.
Risk is always present in the financial markets, and a trading plan will help you maintain objectivity as you make decisions in the market.
A trading plan should also include your trading log, which is essentially a diary of actions taken while trading financial assets.
A trading plan will simplify your trading activity, and help you build and maintain the discipline required to achieve success in online trading.
It will also help you keep track objectively of your trading activity so as to identify areas where you need to make improvements.
Brokers provide access to the world of online global financial assets trading.
It is through their trading software that you are able to interact with the markets and trade your chosen assets online.
A broker is essentially your partner in the world of online trading.
A good partner will provide a good environment for you to achieve success, but a bad broker will practically pull you down before you even get started.
It is, therefore, very important to choose a good broker.
One of the first signs of a good broker is regulation.
Highly regulated brokers are required to keep client money in segregated bank accounts which are completely separate from their operating cash flows.
Regulated brokers are also motivated to offer transparent trading services because their platforms are subject to random inspections by relevant regulatory agencies.
Other factors to consider when choosing a good broker include the trading platform(s), experience or time in the market, reviews, industry awards, payment methods, and customer support.
A common misconception is that trading on a demo account is only for beginners.
Granted, it is very useful for beginners because it helps them understand how to interact with the real market, learn platform features, as well as develop trading strategies risk-free.
But a demo account can also be very useful for experienced investors.
It provides a full-time practice arena for traders to advance their knowledge, skills, and experience in the markets.
Use a demo account to try new strategies, new asset classes, different charting tools and timeframe charts, new technologies such as automated trading tools as well as different risk management plans.
Spending time on a demo account will refine your skills, which you can thereafter deploy confidently in the live market.
A demo account is essentially a learning tool, which if used effectively, can make you a better trader and increase your chances of achieving consistent success in the markets.
‘Give ordinary people the right tools, and they will design and build the most extraordinary things’
Neil Gershenfeld
Tools have been used by humans since time immemorial to make work easier and more efficient.
Trading without the relevant tools and resources in this day and age is like doing manual work the traditional way.
There are plenty of trading tools and resources for online traders, but it is important to use the right ones the right way.
Some important tools and resources include the Economic Calendar, expert advisors (EAs), market insights and commentaries, forex calculators, asset correlation screeners, financial news websites, backtesting software, as well as charting tools.
In recent years, technology has continually made it possible to access other tools and services that can enhance your trading activity.
For example, it is essential to learn to copy trade or utilize diverse social trading tools. It is important to note that online trading is a skill-based activity.
Like any performance-based skill, there is no substitute for experience.
The more you use your favorite trading tools and resources, the more you will gain the requisite experience to deploy them in the right way and in the right circumstances.
Final Words
It is now easier than ever to access online trading but achieving consistent success has proven elusive for many traders.
Nonetheless, the above practical tips can help any trader to take their trading activity to the next level and increase your odds of success in online trading.
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What is a call option?
What is a call option? – Calls vs puts explained
A call option is a bullish strategy that allows a trader to profit from a trade on the upside.
The trader essentially bets that the price of a stock is going to go up by buying call options.
How does a call option work?
When you open the options chain, you will have many contracts to choose from, ITM, ATM, or OTM, which I’ll use as a quick example for now.
If you are betting on the price of a stock to go up, you might buy a contract with a strike price of a few dollars above the underlying securities’ current price, depending on your risk.
If the stock does indeed move up in price, you will begin to see gains on your contract.
You may then sell your contract and profit from your play when you are ready.
What is a put option?
What is a put option? – calls vs puts options – puts vs calls stocks
A put option is a bearish strategy that allows a trader to profit off a trade on the downside.
Unlike calls, traders buying put options are betting the price of a security will drop.
How does a put option work?
I’ll use another OTM example for now and explain the other scenarios below.
You will have many options in the options chain to choose from.
Here you will be able to select a contract to buy based on the ‘strike’ price you’ve selected.
The strike price you’ve selected is where you believe the price of a security will go down to.
If a price of a stock is at $20 and you buy a contract for a strike price of $17, you’re betting that the price of the stock will fall in the future.
If the stock falls to $19 then $18, you will begin to see gains on your bet.
The closer the price of the underlying security gets to $17, the more gains you will see.
You can then close your position at any moment before the contract’s expiration date and take profits.
Both these examples are examples of an OTM contract which I’ll explain more below.
Here are other examples of how calls vs puts work.
What is ATM and ITM?
Options trading: ATM vs ITM
ATM stands for “at the money”.
At the money (ATM) is the current price a stock/security is trading at.
When your strike price is near the current share price this is considered to be “at the money” (ATM) for both calls and put options.
ITM puts
ITM stands for “in the money” and will be a little different for puts vs calls.
When a strike price is in the money for put options, it means the price is above the “at the money” (ATM) price.
Example: You’re betting the price of a stock will go down, so you buy a put options contract “ITM” for $11 while the stock is currently trading at $10 (ATM).
You contract has a higher probability to earn gains since the current share price (ATM) is already below your strike price (ITM).
The further the price of a stock goes down from your strike price, the more money you make.
ITM calls
When a strike price is in the money for call options, it means the price is below the ATM price.
Example: You’re betting the price of a stock will go higher so you buy a call option contact “ITM” at $9 while the stock is trading at $10 (ATM).
Your call option contract has a better probability of making money from the start since the current share price is already above your strike price.
If the price of that stock continues to surge, then you will continue to make gains.
“In the money” (ITM) contracts are a little more expensive to buy since your probability to make money is higher.
“At the money” (ATM) contracts which are closer to the “current” share price had a medium risk factor and are cheaper than ITM contracts.
So then what are OTM contracts?
OTM “out the money” explained
Calls vs puts explained – OTM – Calls vs Puts options
OTM, or “out the money” is the strike price above the ATM for calls, and the strike price below the ATM for puts.
Call option example: If you buy a call options contract OTM at $12 and the price of the stock is currently at $10 “at the money” (ATM), you are betting the price of a stock will rise above $10 per share.
Put option example: If you buy a put options contact “out the money” (OTM) at $8 and the price is currently at $10 “at the money” (ATM), you are betting the price of a stock will go below $10.
Remember, the closer a stock’s price gets to your strike price, the more gains you will reap.
So, the further out the money your strike price is, the higher the reward may be.
Should you buy ATM, ITM, or OTM?
Every trader will use the strategy that best tailors to their risk.
Out The Money (OTM) = High Risk / High Reward
At The Money (ATM) = Medium Risk / Medium Reward
In The Money (ITM) = Low Risk / Low Reward
Traders will need to study the performance of an underlying asset to get a feel and understanding of where the price may go.
Once you have determined whether you will be buying puts vs calls or vice versa, then you may begin to look at the contracts available.
Options contracts explained
Every 1 contract equates to 100 shares of a particular stock.
OTM contracts are usually less expensive.
With these contracts you can buy 100 shares of a stock for only cents.
ITM contracts are more expensive because they are the safest choice.
ATM contracts are in between ITM and OTM in pricing.
The options chain will allow you to choose when contracts based on short-term or long-term expiration dates.
You can go short or long on both a call and put options contract.
These expiration dates may vary from only a few days to weeks, to months, and even years.
Whether you should trade short-term or longer-term expiration options contracts is a strategy that will be highly based on your trading goals.
Where can you trade options?
Options trading with Webull – calls vs puts options – calls vs puts explained
The most popular platform to trade options is Webull.
Webull is where I personally began learning reading charts and familiarizing myself with the options chain and data.
Here traders will be able to purchase calls vs puts or vice versa.
Some traders use both strategies to make money during a bull and bear market.
Other platforms where you can trade options include:
TD Ameritrade
ETrade
Robinhood
Fidelity
If you’re already invested in stocks, you might already be using one of these platforms.
The difference between trading stocks and trading options is that you will need to open a margin account for options.
A cash account will not allow you to buy calls vs puts.
You can earn 5 free stocks from Webull when you sign up using my affiliate link.
If you choose not to keep these 5 stocks, you can sell them and fund your margin account to trade options.
Puts VS Calls: Why trade options?
Puts vs Calls stocks – calls vs puts options – calls vs puts explained
Buying puts or buying calls allow traders to bulk up on stock and use leverage to make money in the stock market.
There are 4 different ways you can trade options.
Buy Calls
Sell Calls
Buy Puts
Sell Puts
All four essentially allow you to use leverage and make money whichever side of the play you want to begin trading options.
However, selling calls and selling puts from the get-go will require further in-depth explanation, which I will do in another article.
For today’s breakdown, I’ve explained buying both calls and puts.
There are a variety of things that attract investors to trading options.
Short-term gains
Big returns
Losses are limited to what you put in your contract
Quick accumulation of cash / shares
If you’re here today, it’s because you’ve probably seen people in your space talk about how much money they’ve made playing options.
And while options can yield a full-time income stream, new traders should also be aware of the risks.
Is trading options risky?
Calls vs puts options – puts vs calls stocks –
Trading options has its risks as bets aren’t 100% guaranteed to play in your favor.
However, there are a few things you can do to increase your chances at becoming profitable.
Familiarize yourself with technical analysis / chart patterns
Only buy what you can afford to lose
While traders can certainly trade based on market sentiment, it would be wise to gain some understanding of how prices move through technical analysis.
TA can help traders determine the trajectory of a stock’s price moves in the coming minutes, hours, days, and even weeks.
It’s best to armor yourself up and learn as much as you can to properly set yourself up for success.
If you’d like me to do a write-up on bullish and bearish patterns leave me a comment below.
When it comes to choosing between calls vs puts, it really comes down to adapting to the changes in the market to help you increase your income potential.
If you have any questions, be sure to leave a comment below.
Leave your thoughts below!