Savings and investment: tips and strategies for trading with small amounts

Savings and investment: tips and strategies for trading with small amounts | The world of trading has changed and continues to evolve. The number of transactions taking place on online trading platforms continues to grow, with small savers earning an important place for themselves.

Online trading makes it possible to overcome the obstacles that keep many people away from traditional investments, namely complicated procedures, high costs, and, above all, the need to have significant capital.

Brokers allow you to access the financial markets even with small amounts: normally a few hundred euros are enough to activate an account, but there are also intermediaries who demand even lower amounts.

It is news these days that eToro, one of the most important companies in the industry, has further lowered the minimum threshold for transactions related to different asset classes (stocks, cryptocurrencies, ETFs) to just 10 dollars.

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Is it feasible to deal with modest amounts of money online?

Is it feasible to deal with modest amounts of money online

Until recently, those who did not have access to large resources had great difficulty accessing more traditional investment formulas. Today, things are profoundly different, as, as mentioned, very few euros can be enough to take advantage of the access to financial markets represented by online trading.

It’s not a coincidence that most of the big gains seen on broker platforms come from trades made by small-time traders who use a small amount of their savings in this way.

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As the experts at explain, for online trading with small amounts, it is first of all appropriate to choose a platform that offers this possibility, such as, for example, IqOption and eToro. In any case, it is necessary to have a good knowledge of the markets and the different financial instruments, keep up to date and follow the advice and suggestions of professionals in the sector.

The strategy to follow is about choosing the financial instrument to bet on, identifying the broker that best suits your needs and deciding on the markets you want to bet on.

The ideal financial tool for making small investments

Let’s go in order: the perfect tool to invest small amounts in online trading are CFDs, or contracts for difference. It is a derivative financial instrument that tracks the price of the underlying asset, which can be a stock, an index, a commodity, a currency pair or a digital currency. Traders do not buy the stock or asset directly but trade an instrument that replicates the price.

In this way, there is the possibility of investing both up and down and the opportunity to focus on a specific asset even with very low values. The advantages related to the use of CFDs are many: firstly, they allow you to avoid paying stamp duty on the deposit of securities; they are very easy to use; the costs are very low (commissions are only paid under certain conditions) and, as mentioned, they allow you to earn up and down by investing small amounts.

Choosing the platform and markets to focus on

The second tip concerns the choice of broker: to be able to trade online even with small amounts, it is necessary to open an account on a trading platform provided by an intermediary.

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It is only necessary to choose brokers who have obtained a license from a European supervisory authority and authorization from Consob. Among the best intermediaries, it is possible to mention eToro, IQ Option, and XTB.

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All the mentioned platforms allow you to open an account with a few tens of euros (ranging from 10 to 100 euros as a minimum initial deposit) and offer a wide range of useful tools and services for traders of all levels.

Brokers make it simple to invest small amounts in various markets; the stock market remains the most fascinating, but the cryptocurrency market is thriving; the foreign exchange market is the largest and most liquid in the world, but the commodities market also offers interesting opportunities.