Trading stocks and investing in shares online is not uncommon in Australia, thanks to the growing technological advances and internet usage. As more and more users find themselves willing to experiment with online trading, reliable platforms like the MT5 downloadable software are making sure that the entire process is seamless. With online share traders growing in numbers since the onset of the global pandemic, Australians are now flocking into trading to make it a reliable income source.
But like most professions, online trading also requires dedication, willingness to learn, commitment and a whole lot of patience. As a result, many quit halfway, not seeing results, and that’s okay! Analysing charts in front of a screen for a considerable amount of time is not for everyone. But those that are willing to learn must understand the risks that they carry and be prepared for any unforeseen market fluctuations.
Stock prices plummeting as a result of the markets being down is one of those moments where online traders panic and lose control of their portfolios. Rightfully so as most traders invest a considerable amount of money into these stocks hoping for the best. Although no one in Australia can accurately predict when a market might crash, there are several things that online traders can do to keep their portfolios safe and mitigate the damage.
1. Don’t Panic: Panic sales are a common term used to describe traders selling off their stocks the moment they feel the market coming down. The idea isn’t about keeping the devaluing stock; it’s about preventing emotions from influencing hasty decisions. Analyse the stocks and figure out how much they can go down. If the total losses are too much to bear, then selling them will be the most strategic option. Take care to note that the market will wind back up in a few years with the prices levelling out at their initial range. Most online traders are amateur investors, and they need to understand this part if they’re to be in control during a downward market trend. The same goes for buying stocks, referred to as panic buying. With the prices being down, it’s easy to be tempted to buy a lot of stocks at lower rates. Again, do the proper research and ensure that they will gain value in a few years before confirming the order.
2. Set Up An Emergency Fund: The best way to stay afloat during a market crash is to have a plan. Keep depositing money into an emergency fund until there is enough to cover expenses for at least six whole months. It’s also a good idea to manage any lingering debt and protect your personal finances too. One can never know how the market crash will hit other financial instruments and policies.
3. Keeping The Portfolio Balanced: To balance the possibility of heavy losses, online traders must be willing to trade short term stocks to adjust the risks. Switching to bonds and commodities futures is also a good idea. However, don’t do this in the middle of the market crash. Instead, wait for everything to settle down.
4. Using Digital Tools: Do the necessary research online and see what other traders have to say. Use the online information from social media and blogs to the fullest and set limits on orders on reliable platforms like the MT5 downloadable software.
Make sure to analyse the risk tolerance of a portfolio and buy and sell accordingly. Read up on the possible scenarios in Australia’s market sector if it was faced with a crash or downward trend.