Beginner’s Guide to Stock Trading


Have you ever decided to invest in the stock market? If so, let us teach you some of the basic facts you should consider before you begin stock trading.

Businessman checking the markets in his device


First, you have to assess the amount of risk that you can work with.

Are you a risk taker? Or would you rather not encounter risk as much as possible? Or just somewhere in between?

You need to be able to know this in order to help in choosing the stock you should invest in.

If for instance, you ended up investing in a high risk stock and you’re averse to risk, you might end up succumbing to pressure when the stock price suddenly fluctuates. This can be a bad situation for you to be in, and it would be better for you to avoid it as much as possible.

But you should also remember that stock trading is a risk in on itself. When you enter the stock market, or any market, it means that you are willing to take on risks whether big or small. The good thing though is that there are methods you can use to avoid or manage the risks that you get involved in.

Time and Interest

Should you invest in stocks, funds, or both? The answer will depend on the time you actually want to devote to this endeavor.

Choosing to invest in mutual or index funds, will let you invest your money and will leave the hard work of picking stocks to the fund manager. Index funds are even simpler to invest in since they go up or down depending on the index that they are tracking.

On the other hand, individual stock trading can take a lot of your time. It will require you to make judgments regarding management, earnings, and future prospects. You will also need to be able to distinguish between a money-making stock and financial disaster.

You must do your research about the company, studying their public data and making decisions based on those. If you enjoy research and you have enough time, then consider investing in individual stocks.


You should always keep this in mind when choosing the stocks you invest in.

Make sure to keep your portfolio diverse. Meaning, choose stocks in various markets with different vehicles. Make an effort to keep your stocks unrelated to each other.

Diversification can help lessen the loss you incur when a market crashes. This can be witnessed when an event takes place and ends up having different effects on different parts of the market.

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