How to make money on the stock exchange for a beginner at home

Nowadays, people are increasingly looking for ways to make money on the Internet. There are different types of remote work, but one of the most popular is trading on stock exchanges. It is believed that such activities can bring considerable income. Therefore, many are interested in information about how to make money on the stock exchange, what needs to be done for this and whether income is available for beginners.

What is an exchange in simple words

An exchange is a platform where financial assets are traded.

Different types of exchanges trade different assets. The following types are distinguished:

Stock (shares, bonds);
Foreign exchange (all currencies);
Commodity (commodities, food, metals);
Futures (futures and options, otherwise called: derivative financial instruments or derivatives);
Forex (currencies, gold, indices);
Cryptocurrency (Bitcoin, Litecoin, Ethereum, Ripple);

Each exchange has its own specifics and risks; you can make money everywhere.

Most often, earnings on exchanges occur due to the difference between the purchase and sale of an asset. Bought cheaper, sold more expensive. The difference between the sale and purchase prices is the profit for the trader.

Let's list the basic concepts of making money on the stock exchange that are necessary for work:

A trader is an active participant in exchange trading who makes money on the difference between the purchase and sale prices;
A broker is an intermediate link between the trader and the exchange. It provides access to trading terminals, compiles reports for the client;
Investors are long-term participants in trading. They rarely trade. Investments are made for a long period of time in order to earn money from dividends and price increases;
Trading - a variety of trading operations for the purchase and sale of assets for the purpose of earning money;
Margin trading is trading using borrowed funds from a broker;

Traders and brokers are completely different people; they should not be confused.

To start making money on the stock exchange, we’ll tell you what types of markets exist.

Profitable currencies

Many currencies can be included in the list, but in our country two will be relevant - the dollar and the euro. This is due to the fact that there are not many banks that provide a wide selection of funds. For example, it is difficult to buy a Swiss franc or a Polish zloty, although at first glance it seems that this will not be a problem. Even if the currency is at the bank's disposal, there will be a high spread on it. Waiting for exchange rate changes of 7-8% to cover costs will be pointless.

There is a different trend in working with the ruble. The exchange rate is constantly changing - falling and rising. The investor can only focus on the euro and the dollar, tracking the difference between purchase and sale prices.

Three types of markets for making money

Foreign exchange (Forex);
Stock market;
Cryptocurrency;

All markets can be traded remotely via trading apps on smartphones. You can register with brokers from home. Let's take a closer look at their differences and similarities.

2.1. Forex

Forex (“Forex”, from the English FOReign EXchange - “foreign exchange”) is the world’s largest trading platform for interbank international currency exchange at market prices.

Most beginners begin their acquaintance with stock trading through Forex. This is due to the fact that Forex brokers are actively advertised on the Internet. It's hard not to notice their advertising. Advertising of stock brokers is much less common (since 2022, advertising of securities has become more active).

You can make money on Forex only through currency speculation. This is the main purpose of this site.

Forex statistics are sad: 95% of traders lose money. Although in advertising you can see almost mountains of money from the players. But these are just tricks of Forex brokers.

Almost always Forex brokers offer large bonuses for replenishing your account. For example, a bonus of 100% on deposit. In fact, this money is not given to the client. To get them you need to make a colossal trading turnover of 1000 of your deposits. With such a large turnover, you can lose all your starting capital.

Forex broker bonuses are just a bait for replenishing your account and conducting active trading. Actually getting this money is almost an impossible task.

The Forex market is primarily about trading currency pairs:

EURUSD;
GPBUSD;
USDJPY;
USDCHF;
CADUSD;
etc.;

There is no mechanism that could predict further changes in quotes. Therefore, basically this game is beneficial only to the broker, who receives a commission from each transaction.

Reliable Forex brokers for making money from trading:

ROBOFOREX
AMARKETS

Pros of the Forex market:

Maximum availability;
You can start with minimum deposits;
Large leverage available;

Minuses:

Suitable for trading only;
Most people lose money in Forex;
Takes a lot of time;
There are fees for moving open positions overnight;

Forex - what is it;
How to make money on Forex from scratch;
Forex for beginners;

The foreign exchange market is often equated to Forex, but this is not true. On the foreign exchange market, transactions with currencies worth hundreds of billions of rubles are carried out. Moreover, this is a real exchange of money, which can then be withdrawn.

2.2. Stock market

The stock market (from the English “stock market”) is an open securities market where each participant can sell and buy financial assets. Sometimes it is also called the financial market or stock exchange. Abbreviated as FR.

Unlike Forex, financial assets in the stock market tend to grow. Therefore, if you simply buy stocks and bonds, then over a long period of time (from 5-10 years) the investor will most likely make money.

Statistics say that the average growth of the stock market per year is 10-15% per annum. However, individual years can bring serious losses up to minus 90% or more. For example, this was the case during the financial crisis of 2007-2008, but after that there was a sharp recovery in stock exchange quotes.

The stock market is regulated by law, so investors' funds are protected from theft, but not from falling prices.

Investors can invest in real businesses through securities.

What is traded on the stock market:

Shares (domestic and foreign);
Bonds (government bonds, corporate, Eurobonds);
ETF funds (stock indexes, bonds, mixed, commodities);
Options (exchange options PUT and CALL);
Futures (for stocks, indices, commodities);
Currencies (dollars, euros, yuan, francs, etc.);

Stock market - what is it;
Issue-grade securities;
Types of shares;
Debt securities;
Dividends - how to get them;
Is it possible to earn money from investments?

The stock market was not particularly popular until 2022. In 2020/2021. advertising for stock brokers has grown rapidly. This is due to the influx of new clients due to the lowering of the key interest rate by the Central Bank. Keeping money in deposits became too unprofitable and citizens were looking for ways to earn more.

2.3. Cryptocurrency market

Cryptocurrency exchanges (cryptoexchanges) are sites that provide cryptocurrency trading services.

This market is very young. Its dawn came in 2022 with a rapid increase in the value of cryptocurrencies by 50 and even 200 times. After which many coins fell by 90% or more. Many have still not recovered in price.

Cryptocurrencies represent digital money. Although it is difficult to call them money, since they are not recognized by anyone. Officially, few people accept them for payment.

For traders, the cryptocurrency market is interesting due to its high volatility. Stock prices can rise and fall rapidly. This is very popular with speculators who can make money quickly, but someone loses on this.

If you want to actively trade with high volatility, then crypto exchanges allow you to do this. High liquidity allows you to quickly make transactions with minimal commissions, and high volatility allows you to quickly take profits.

There are many crypto exchanges on the Internet. But in fact, there are only a few leaders for cryptocurrency trading:

BINANCE (the largest exchange in the world, there are only cryptocurrencies)
EXMO (best exchange in Russian)
BITMEX (possibility of margin trading and bearish play)
YOBIT

They have mobile apps to make transactions anywhere.

Trading on the cryptocurrency exchange for beginners;
What is cryptocurrency;
Top cryptocurrency exchanges;
How to make money on cryptocurrency;

Bitcoin was once worth less than a cent. At the time of 2022, its quotation had already exceeded 60 thousand dollars. This is an extremely risky investment. You can lose 100% of your funds, but the profit potential is great. This stock exchange tool is for professionals.

There are 4 popular cryptocurrencies with high volatility and a long history:

Bitcoin;
Ethereum;
Litecoin;
Ripple;

Risk management money management

Some tips for work:

Enter a position using part of the trading deposit. When the price moves in the desired direction, increase it.
Work with different instruments on the stock exchange. Diversify risks.
In active trading, be sure to use stop orders. Even if the price moves in the desired direction. A trailing stop is a good trading tool.
Hedge equity assets with derivatives for part of the position.
Don't let your losses grow. Fix immediately using stops as soon as the amount of losses reaches the planned value.
Trade with the trend.

How to make money on the stock exchange: trading and investing

The first thing you need to make money on the stock exchange is money. If there is no money at all, then there will simply be nothing to earn from. Therefore, it is worth having at least a small starting capital of 50-100 thousand rubles to start trading. Next, you can regularly save and save money.

The more money in the account, the greater the opportunities and profit potential.

For most, there are only two options for how to make money on the stock exchange:

Trading. Active trading and earnings on exchange rate differences. Reminiscent of speculation;
Investments. Long-term investing and obtaining market returns;

Beginners can choose two methods at once, that is, trade, and save some of the money for the long term.

Trading vs investing - which is better and more profitable;
Active and passive investing;

3.1. Trading - how to make money

Most people start with trading. Even if it seems to them that they want to be investors, then after the first growth of 10-30% they begin to twitch: I’ll sell now, then I’ll buy it back. This is not the approach of investors, but the approach of speculators.

To make money from trading you will need knowledge of technical analysis, experience and luck. It is rare when a trader begins to make successful money after a year. Most often, success at the beginning of the journey is more likely due to a successful combination of circumstances. But beginners can rush into a rush, seeing dizzying success. And the reason for this success is that the trader simply luckily fell into a period of a growing trend.

Stories about the inability to stop trading end badly. The trader loses the money he earns and even loses his investment.

There are no win-win trading strategies. There will be periods of strong growth, but there will also be prolonged declines in the trader's balance. Not everyone is ready to endure losses for several weeks, or even months, in a row.

Where to start your study of trading? I advise you to read the article describing the simplest working trading strategies:

Trading strategies for the exchange;

Check out our technical analysis materials:

Technical analysis for beginners;
Japanese Candlesticks: A Detailed Guide for Beginners;
Forex technical analysis figures;
Candlestick models and patterns with examples;
Support and resistance levels;
Divergence and convergence in trading;
What is overbought and oversold;
The stock market is growing with volumes - what does this mean;

Description of basic trading strategies:

Moving average crossover strategy;
How to develop a trading strategy yourself;
Pyramiding strategy;
Level breakdown;
VSA analysis;
Martingale strategy;

Pros and cons of trading

Pros:

Potential high profits;
Maximum simplicity of trading terminals for making transactions;
Lots of information available;
There are no restrictions on earnings;
You can trade any financial instruments: stocks, currencies, commodities, cryptocurrencies;
You can trade whenever you want;
You can earn money during periods of decline, growth and flat;
Possibility to trade down;

Minuses:

Takes a lot of time;
Emotionally hard work as losing trades will occur regularly;
There are risks of losing money;
It takes a lot of experience before you start making money confidently;

The main secret of making money from trading: PODEPRODO. Which means: buy low, sell high.

Is it possible to live on earnings from trading?
The truth about trading;

3.2. Investments - how to make money on them

After trading, most traders become investors. For many, investing is simply a more profitable option.

The safest way to invest is simply in securities, since they tend to grow over time.

For example, stocks have an average annual return of 12-15% per annum. Bonds have lower returns, but they also have lower risks. We would like to note that this refers to the average return over many years. In a particular year or period, the value can deviate greatly from this norm, both up and down.

I would like to show a graph of the growth of the American stock market since its opening (and this has been more than 200 years). The graph shows the growth of $1 invested in stocks over 200 years. During this period, $1 grew to $10 million.

Many articles have been written about investments on this site. I recommend that you familiarize yourself with the basics:

Investing in securities is a simple matter of complexity;
Investing in shares - what you should know;
Investments in bonds - what you need to know;
Passive investments in stock index;
Value investing;
Buy and hold principle;
When to buy and sell shares;
Which stocks are better to invest in?

Not all financial assets are suitable for investment. For example, currencies, cryptocurrencies, and goods do not generate passive income, so they are not suitable for simple holding.

How to calculate profit from a transaction for tax purposes?

This is not difficult to do. Profit from an operation is income. Enter it into accounting and pay tax. The main task of the trader will be not to get lost in the course. Profit is calculated based on the difference between the established tariff of the Central Bank and the bank on the day of the sale transaction. To make it clearer, see the example.

A purchase of $10,000 has been made. The exchange rate was 76 rubles per $1. The transaction amount is 760,000 rubles.
The currency was sold at the rate of 78 rubles per $1. The trader received 780,000 rubles in his hands. The Central Bank exchange rate at the time of the transaction was 77 rubles per $1. This is the value that needs to be displayed in accounting.
The profit amounted to 10,000 rubles (770,000 – 760,000). The trader must pay tax on the amount of 10,000 rubles.

Exchanges for making money on trading - overview of the main ones

What is the best exchange to choose to make money from trading? In fact, this is not so important if the question concerns trading. Assets can be bought and sold anywhere. But as for the investment option, it is better to choose the stock exchange as the most profitable and safe option among the others.

Let's consider each direction in detail.

1 Forex

In Forex, the main disadvantage and risk are brokers. There is a risk of losing money from his account.

The small list of tools for trading on Forex does not allow you to really choose what to make money on. Liquid currency pairs can be counted on one hand. There is a fee called a “swap” for moving a position overnight. Therefore, you only need to make short-term trades, which wastes time and limits your earning potential.

2 Cryptocurrency market

Suitable for those who already know the basics of trading. Of course, you can invest here, but the risks of loss are very high.

Cryptocurrencies are better for those who already have some good savings and use the crypto market as diversification. That is, as an alternative option. It is quite possible that such an investor will be able to earn a lot of interest over time. At the end of 2022, Bitcoin costs 60 thousand dollars.

3 Stock exchange

Allows you to both actively trade and simply invest. This option is suitable for everyone. There is a very large selection of financial assets, behind which there is a real business.

The main advantage of the stock market is investor protection. Stock brokers are regulated by law, unlike Forex and crypto exchanges.

Next, we will look at step-by-step instructions on how to start trading on the stock exchange as a beginner from home.

Points that everyone who trades currencies or plans to do so should know

When selling euros, dollars or other monetary units, you need to take into account the bank commission. Sometimes it can “eat up” part of the income. If the rate has increased, but only slightly, there are risks that profit from the transaction is completely excluded.
Feel the market, analyze oil prices, keep in mind that political factors may influence exchange rate fluctuations. Having learned to correctly forecast, relying on the policies of the Central Bank, you can start making good money.
Pay taxes taking into account the profit from sales transactions as “Non-operating income”.

It is necessary to reflect profit in accounting, and this measure should not be neglected.

Step-by-step instructions for registering on the stock exchange

Using the stock market as an example, let's look at how to open a brokerage account and how to start making money on the stock exchange.

Start trading on the stock exchange now »

Step 1. Register with a broker

You must register with a stock broker. You can have several at once, no one bothers you to open several brokerage accounts. I have been working with the following for many years:

Finam (promotion: Free Trade tariff, trading without commission forever)
BCS Broker

These are some of the best brokers with quality services (technical support, accessible service, trading applications). The commission for trading turnover is minimal among other companies. Through them you can trade all available financial instruments on the stock exchange.

The broker's registration form looks like this:

Which broker to choose for trading on the stock exchange;
How to choose a broker for the stock exchange;

Step 2. Opening a brokerage account (IIS or EDP)

You can open a brokerage account in your personal account in your personal account by clicking on the “Open a new agreement” link:

When opening, you must select the account type:

Beginners should start with simple versions of EDP and IIS accounts. If you are thinking of withdrawing profits or withdrawing money in the next 1-2 years, then it is better to open a “single cash position” (SMP). If there is no need to withdraw money in the coming years, then you can open an IIS.

I recommend opening an IIS to receive tax privileges in the future. The following are available for trading: currencies, stocks, bonds, ETFs and even American companies. It is better to open it faster because it can be closed only after three years to receive tax deductions. You don’t have to replenish it, but simply open it. Read more in the articles:

IIS - answers to questions;
How to get a tax deduction for IIS;
Which is better? IIS or brokerage account;

Step 3. Depositing and withdrawing money from your trading account

Depositing and withdrawing from a brokerage account is carried out without commission. Can be done in cash or by bank transfer.

If the broker's branch is located far from home, then it is more convenient to use an interbank transfer. For example, through a Tinkoff debit card (deposit and withdrawal without commission, card review"). As a result, you can transfer money to your brokerage account for free, without leaving your home.

You can withdraw money at any time from your brokerage account without commission. The only limitation is for IIS. Here you cannot withdraw money partially, you can only close it completely.

Step 4. Buying/selling securities

Trading on the stock exchange takes place through trading terminals. The broker will provide access to them.

The most popular terminal is Quik. You can perform operations on it only through a personal computer:

Smartphone apps have been around for years. For example, the broker Finam calls it “Finam trade”. This is what the interface looks like:

Select the financial instrument you want to purchase and then submit an application. Set the price and quantity. The application is immediately sent to the exchange:

How to buy Sberbank shares;
How to buy Gazprom shares;
How to invest in Yandex shares;
How to buy foreign shares;

Alternative Income Methods

In addition to trading on the stock exchange, there are other ways of income:

Partnership programs. A person publishes advertisements, thereby attracting other people to the brokerage company. As a result, he receives commissions for this.
Forex pays people who are willing to publish various news about the exchange on websites and portals.

Such methods will not bring much income, but this is an opportunity to earn a little and start trading on the stock exchange.

If you wish, you can take training in trading on the stock exchange.

Tips for making money on the stock exchange

1 Start by gaining knowledge.

The exchange is not a casino with the opportunity to make quick money. This is trading with professional market participants who have more information, experience and money. In the long run, they cannot be beaten simply by luck.

You should read the basics of the stock exchange. On this site you can find a description of many indicators, trading principles, information on risks and portfolio construction.

Stocks and Bonds - Key Differences;
How to create an investment portfolio;
Investment strategies on the stock exchange;
Stock buying strategies;
How to choose undervalued stocks based on multiples;
How to choose stocks to buy;

You can watch a lot of videos on youtube on securities and stock trading. It's free and useful.

2 To make money on the stock exchange you need to perform fewer trading operations. Typically, the more you trade, the less you earn.

Short-term trading and scalping are for professionals and gambling enthusiasts.

Intraday;
Scalping;

3 Combine fundamental and technical analysis. That is, look for undervalued companies with growth potential. Next, based on technical analysis, select entry points.

Not only the choice of the “right” assets is important, but also the optimal moment of purchase. Sometimes this is even more important than the choice itself.

Technical or fundamental analysis;
Fundamental analysis - basic principles;
Undervalued shares
Investment ideas
Top dividend-paying Russian stocks

4 Regularly deposit money into the stock exchange to accumulate the amount.

This principle is called the “average uniform investment method.” Statistics show that this method brings excellent results.

How to become rich from scratch;

5 Limit losses if transactions are speculative and short-term. For this purpose, there is a stop loss (protective order), which will allow you to sell the position if stock quotes move against the trader.

How to look for the best stop loss levels;
Stop loss and take profit - what is it;

6 Be careful with leverage.

For most beginners, using borrowed funds most often turns out to be their fatal mistake. Out of ignorance that the market may suddenly go against them, they take a leverage of x10, and then they can add up to x50. The broker provides such opportunities. But as soon as the price moves 1-3 percent against the trader, a margin call occurs (forced closure of the position at the current price).

Fraudulent schemes

Scammers are trying to lure traders to fraudulent exchangers. They use advertising with favorable conditions. Information about a profitable project appears in contextual advertising. Tariffs attract by reducing commissions by 2 times. A trader is in a hurry to buy currency at an exchanger, but after transferring money to his account, he ends up on the resource’s blacklist or encounters an error in the server’s operation.

Participation in exchange chains is accompanied by high risks of losing capital. The investor performs an operation on the website, making the transition from one resource to another. There may be foreign portals in the chain. Fraudsters initially gain the user’s trust. They successfully carry out exchange operations. Only at the end of the chain will there be deception. Transferred funds cannot be returned.

You should never download free applications and programs for traders. Avoid bots and other products that contain virus files. These techniques allow scammers to hack the device and take over the user’s funds. A verified antivirus must be installed on your PC.

How much can you earn on the stock exchange?

The amount of earnings on the stock exchange strongly depends on the trader’s capital, so it is better to answer the question “how much can you earn on the stock exchange as a percentage.”

You can earn 100%+ per annum from trading, but only a few succeed. More realistic figures are 20-50% per annum in the case of good years and if you devote a lot of time to it.

The famous trader Larry Williams said that earning 30% on the stock exchange in a year would be an excellent result. It's hard to disagree with him.

How much can you earn by trading?
How much can you earn from stocks?
Stock return;
Bond yield;
ETF yield on the Moscow Exchange;
Profitability and risks of the investment portfolio;

Opening a foreign currency account in a bank

This is an easy way for those who are already familiar with the services of banking institutions in the city. You can continue cooperation with the institution where the ruble account is opened. With the help of modern IT products, an investor does not even need to waste time and effort on a trip to the bank. All you need to do is use an app or internet service.

A foreign exchange account provides for payment to the bank for a service. The amount will depend on the tariff chosen by the client. If the offer includes foreign trade services, an account can be opened for free. In other cases, the payment is the same as for ruble. Together with him, the bank will open a transit account. It is not needed to make money from dollars, but is used to receive transfers from other countries and pass exchange control.

Pros and cons of making money on the stock exchange

Pros:

Possibility to trade anywhere;
Large selection of financial instruments for trading;
It is possible to make money on the stock exchange through investments, that is, simply purchasing assets and further holding them;
High earning potential;

Minuses:

You must have start-up capital;
Income largely depends on the size of the deposit;
It is necessary to learn trading and investing;
High volatility in the market will make it difficult to live peacefully;

How much can you earn by trading - detailed information
Foreign exchange market, participants, nuances of trading - a detailed overview
Global financial market - what it is and how it works
Bulls and bears on the stock exchange - who are they?
Buy Chinese shares for an individual - how to do it
Why do you need to buy shares - why do investors do it?
The truth about trading from a trader - what is real...
Where to invest up to 1 million rubles to save...

Own exchange office

When considering ways to earn money in dollars , it is worth mentioning the idea of opening your own exchange office. It is important to understand that the procedure is not easy. It will not be possible to open your own business in the foreign exchange sector without fulfilling the requirements. You need to conclude an agreement with the bank. An entrepreneur must invest considerable start-up capital, which will be distributed to:

deductions to the bank (for the collection procedure, cash register, software products, etc.);
renting a place;
purchase of equipment and safe;
remuneration for security and cashier of the exchanger.

Your own point of sale and purchase of dollars or euros has risks. The reliability of the business is low compared to a bank, and there is also a risk of cash register robbery. The chances of earning money are present, although you can consider other, more attractive ways in economic terms.