Which abilities can use beginner traders to earn money in advance?
Trading is not that easy. You should learn a lot before you start your regular profitable trading. But sometimes you have no time to learn and train a lot to achieve your income, but you already have some money to make profit. How can you make some profit from it? Of course, you can put them on your bank deposit, but banks usually offer low passive income, and many people want more – that’s why they come to the investment industry. So, how the beginner trader or investor can make profit without proper skills? There are several abilities to do it, and in this article we will overview them.
Fiduciary management
Fiduciary management is a feature of entrusting your funds to professional traders or investors in order to increase them with some risk. That’s a typical service of brokerage companies, which is well-known for centuries. If there are different options, before starting fiduciary management you should talk to your broker which is the best one, trying to find a perfect compromise between risk and profitability.
How does it work? You need profit and traders need money for making more profit. Professional traders are skilled and experienced enough to make money in the stock market. You entrust your money to the professional traders, they use it in trading and then return you with some percent of profit. The profits form trading are divided between you and the managing traders.
Pros and cons of fiduciary management are the following:
| Pros | Cons |
| Fiduciary management is usually provided by brokers, and brokerage companies are well regulated in many countries. | Sometimes it’s more risky of scumming, if you don’t see how your money grows or loses. You just have to trust your broker and managing traders. |
Fiduciary management is offered by the majority of brokerage companies. For example, the best fiduciary management providers in the USA are:
- Fisher Investments
- CAPTRUST
- Summit Rock Advisors, LP
- Wealth Enhancement Advisory Services, LLC
- Mesirow Financial Investment Management, Inc.
Social trading
Socialization sometimes means education, and education sometimes means copying. That’s the principle of the social trading – one of the features that can help the beginners to earn money from stock exchange.
How does it work? An experienced trader, called managing trader or signal provider, establishes a trading strategy. Beginner traders start to follow (copy) this strategy and become followers. They copy the trading positions (trading signals) of the strategy manually or automatically. But they copy it not for free – they pay for copying a fixed sum monthly or some percent of their income to the managing trader. So, copy-trading is profitable for both managing traders and the followers, because the more followers your trading strategy has, the more money you receive. One managing trader can create more than one strategy – for example, the conservative and risky one.
Pros and cons of social trading are the following:
| Pros | Cons |
| You can upgrade your trading skills from watching more experienced traders’ trading strategies. | Social trading is not so well-regulated as brokerage. |
Where can you start social trading? Here is the top of social trading services, which you can find online:
- eToro (etoro.com)
- ZuluTrade (zulutrade.com)
- AvaSocial (avatrade.com/trading-platforms/avasocial)
- Heartbeat (https://hrtbt.co.uk/)
- FXTM (forextime.com).
Algorithmic trading
Robots, like cats, are our friends, aren’t they? Why not to use the possibilities of modern technology to receive passive income? Algorithmic trading at your service.
Algorithmic trading is automated trading available on some trading platforms. In this kind of achieving passive income you buy some software which start trading for you. Many of this programs just help you in trading, but some of them (called trading bots or trading robots) can absolutely automate your trading process.
Some services which provide trading robots enable you to test them on the stock market historical data. For example, the Kryll service enables you to check every new trading algorithm on the data of the previous six month – you can simulate it and check your profits, whether this algorithm is successful or not.
Pros and cons of the algorithmic trading are the following:
| Pros | Cons |
| Trading bots work 24/7 and are not affected by emotions. | Trading robots are just algorithms, so they can’t use any improvisation. Moreover, it’s hard to find good trading robots. Also sometimes they are quite expencive. |
| Accuracy and speed. Trading robots are more accurate and rapid than the human traders. | Algorithmic trading sometimes is not well-regulated. |
Trading robots are perhaps the most hard-to-find feature in our list. But if you ask experienced traders about the best algorithmic trading providers, they will name the following ones:
- Tradebot Systems
- Two Sigma Investments
- Virtu Financial
- RSJ Algorithmic Trading
- XR Trading
- Kryll.
Summary
Every kind of achieving income in advance has it’s pros and cons. Fiduciary management is the most traditional way to make money without trading skills – it’s strictly regulated, but usually you don’t see what exactly happens with your money, you have to trust trader that he or she really uses them in trading. Social trading enables you to learn how to trade from the masters of it, but it’s not so strictly regulated in the majority of the countries. The latest word in fintech, trading robots are devoid of human disabilities – are not affected of emotions and are more accurate and rapid then trading humans. But they’re usually expensive, and also it’s hard to find good trading algorithms that really trade well. Also this “last word of fintech” is still not so well-regulated as brokerage and ordinary trading.
You can choose any of these instruments to achieve your profit. Regardless of what will you choose we hope that this article was useful for you and you will earn enough money from the selected service. We recommend you to try the mentioned companies and services to cooperate with. But don’t forget, that nevertheless you can earn some money from the stock market without any knowledge, if you want to achieve a reasonable passive income, you have to boost and upgrade your knowledge about the investments regularly. Good luck in your money-making!
