The subject of trading stocks often draws a diverse range of opinions on how to about doing it successfully and what to focus on, which can be highly confusing to someone who is just starting out and wants to learn the ropes.
Understanding aspects of trading such as how oil prices can influence the price of individual stocks and what triggers to look for when you are buying or selling stocks, are just two components that all combine to hopefully make a profit from trading stock successfully.
One thing you want to avoid if you can help it, is to ensure that any mistakes you make don’t become too expensive, so here are some the basics to get you started in stock trading.
Practice makes perfect
Even professional traders can make mistakes, so when you are faced with a trading screen that is unfamiliar to you and you are under pressure to accept a price being offered to you for a very limited period of time, it can be all too easy for a novice to do something wrong or that they did not intend to trade.
One of the best pieces of advice you can get, is to show some patience despite your excitement to get started in trading stocks. Get yourself signed up with a good online broker account and then take the time to get familiar with the layout of their trading screen, before you start spending any real money.
Another excellent strategy to start with, would be to use a virtual trading option, which many brokers offer as part of their service. What this does is allow you to trade as though it was for real, but with imaginary money.
Using a virtual trading facility allows you to become extremely comfortable with not just how to trade when it comes to doing it for real, but also for playing out various trading scenarios and strategies so that you can see if your trading ideas will work, when you come to investing real money.
Do your research
There are many thousands of instructional books and videos around that offer an opinion and tips on how to trade stocks successfully.
It is impossible to read them all of course and it would be highly confusing and implausible to take every bit of advice on board and put it into practice. However, it would be a good idea to pick a couple of the most highly-rated books such as How to Make Money in Stocks by William J. O’Neill, which has sold a couple of million copies if that helps to instill some confidence in the content, and factual websites like investopedia are worth visiting, to get some background to the jargon and mechanics of trading platforms that you will encounter.
A bit of research should go a long way to giving you a basic grounding and an understanding of how to trade and what strategies you might decide to apply to your trading.
Finger on the pulse
The internet is undoubtedly the information superhighway and this means that combined with other media channels, you have access to as much information on the financial markets as you will ever need, to be able to make a trading decision based on real-time data.
You can certainly fill your day watching TV investment shows and get plenty of ideas what to trade, along with the thousands or millions who might be thinking about following the same recommendations, but if you are serious about trading stocks, it might pay to sign for a few subscriptions and bookmark useful sites, so that you can keep your finger on the pulse and get a good feel of what is going on in the markets.
Slow and steady often wins the race
You will often hear or read about a trader who has hit the jackpot with an audacious trade that has paid off spectacularly, but going all-in on a stock trade, especially if you are new to the game, can often lead to losses.
You might get lucky or just happen to have the Midas touch when it comes to stock trading, but the general way of keeping your sanity and your money, is to take a slow and steady approach to investing, which means building up profits slowly and steadily rather than going for broke with one trade.
Trading stocks can be rewarding and a great way to accumulate wealth, but if you are new to the game, it makes sense to try and learn the ropes before you commit all of your cash.
Charlie Pearce has been trading commodities for years, and with his leap into the digital world, thought it high time he shares some of his insights with keen-to-learn youngsters. He writes for investment and finance blogs mostly, with a few news sites thrown in.