Beginner’s Guide to Stock Trading

Share:

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

Risks

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.

Diversification

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.

Ready to test out your skills in trading? Join us at FSMSmart! We’ll keep you updated about everything happening in the stock markets. Never miss another opportunity. Register for an account today!

5 comments:

  1. Thanks for the guide! Helpful for those who's just starting out
    Australian Shares to Buy

    ReplyDelete
  2. Thank you for sharing such valuable and helpful information and knowledge. This can give us more insights! Keep it up. I would love to see your next update.

    Shares to Buy

    ReplyDelete
  3. I like your article, it's pretty awesome. I also got one nice article you can also check this out here it is: Some Key Facts related to Share Market Trading & Tips

    ReplyDelete
  4. We’re going to break down stock trading training for beginners so it doesn’t seem scary. One of the first things you need to do when you start out is to pick a good broker. A stock broker is going to be where you do all your business. Picking one that has large commissions and fees can be detrimental to a beginner.

    An important second step is going to be learning how to read a stock chart. The stock chart holds all of the clues to which direction the stock is going to move. Watch our ThinkOrSwim video on charts setup.

    Another great resource for learning to read a chart is stockcharts.com. They have a chart school for any questions that you might have. Charts can look like Greek when you’re starting out. The more you look at a chart, the more you’ll understand it and be able to predict trends.

    ReplyDelete
  5. We’re going to break down stock trading training for beginners so it doesn’t seem scary. One of the first things you need to do when you start out is to pick a good broker. A stock broker is going to be where you do all your business. Picking one that has large commissions and fees can be detrimental to a beginner.

    An important second step is going to be learning how to read a stock chart. The stock chart holds all of the clues to which direction the stock is going to move. Watch our ThinkOrSwim video on charts setup.

    Another great resource for learning to read a chart is stockcharts.com. They have a chart school for any questions that you might have. Charts can look like Greek when you’re starting out. The more you look at a chart, the more you’ll understand it and be able to predict trends.

    ReplyDelete