The Basics of Stock Trading?
Stock trading could be defined as purchasing and selling shares of publicly traded companies. There are multiple popular stocks and most of them are in America. There are always buyers and sellers. This is how the market works and the value of the stock is connected to the supply and demand at this moment. In this article, we will discuss some ways of trading.
1. Open a stock broker account
You should firstly search for an online stock broker. It’s crucial to open an account and learn how to use the trading tools. You can start off with a fake account before you get enough experience to actually start with real money.
2. Get educated with books
This is a cheap way to learn more about stock trading. A good one is How to Make Money in Stocks by William O’Neil.
3. Read articles
There are multiple credible sources where you could learn more about the market. The main website is investopedia.com. You could also always do a simple search on Google in order to find materials for your study.
4. Learn with a friend
It would be great if you get the chance to have a mentor. It could be anyone – a friend, teacher, family member. As long as they understand the market, they could teach you personally and improve your skills. Every successful investor has started off as a beginner and has sought the help of mentors. You could also visit onlive forums and ask away. You should always double-check the answers since not anyone could be trusted.
5. Learn from other investors
Studying successful investors is another way of learning. Sme of those are Warren Buffett, George Soros, Peter Lynch, Paul Tudor Jones and so many others.
6. Follow the stock market
You should create a habit of following the market though different outlets. You can turn to the Wall Street Journal and Bloomberg. In this way you will get used to the whole process of checking and get immersed in the market. Read the news, check fundamental data or just watch TV. CNBC is a great channel for this. At first you might not understand everything, but with time you will get used to the language that is used.
7. Paid subscriptions
Paying for research and trade ideas could be a good idea. There are many such websites, it all depends on your goals. Two good ones are Investors.com and Morningstar. You should always do your research about the service you will be paying for since almost all of them are not actually a good investment and could be very expensive.
8. Seminars and online courses
Seminars can teach you a lot about the market and how to invest properly. Most of them are focused on a particular topic. There are also free ones out there so you don’t have to worry about your finances while trying to get educated. And as for the online classes – most are expensive, but could come of great use. You should also be very careful when paying for such lessons. The prices are very high for some of them and the knowledge you will gain is not that valuable.
9. Practice through a simulator
When you have your account for trading setup you should go ahead and purchase your first stocks. You should always begin with a small amount. And if you are still too scared to try with real money, there are also simulators. By using it you will be able to gain more experience and feel more comfortable.
10. Buy and hold the market as Warren Buffet said once
For most people, online trading (especially day trading) will not be able to outperform simply buying the entire market, and holding it for a long period of time. The amazing Warren Buffett has advised individual investors to simply passively invest (buy and hold) instead of trying to beat the market trading stocks on their own.