If you’re just starting out in the world of stock trading, it’s important to understand that the name of the game is “trial and error.” It’s exactly like riding a bike—there’s going to be a learning curve. But then what’s the best way to tackle this reality? The solution and the key to success in trading stocks is to benefit from several quality sources of education about the subject.
One of the neat things about the game of stock trading is that you can play for your entire life. You have all the time in the world to enhance and refine your skill set. The strategies they used decades ago to get ahead, like utilizing margin transactions, are still useful today.
Let’s start at the beginning. What exactly is stock trading? It’s defined as the purchase and sale of publicly-traded company shares. Many Americans are familiar with popular stocks (blue-chip stocks) like Apple (AAPL), Uber (UBER), and Netflix (NFLX).
For everyone who wants to buy in the stock market, there’s someone who’s ready to sell. If you buy one share of stock, then someone has sold a share to you. Someone cannot sell shares unless someone else is in a position to purchase them. When more people want to buy than sell, the price of the stock is expected to increase. In other words, the stock analyst price targets have risen. The price target goes down if there are more willing sellers than buyers.
When you’re ready to buy and sell stocks, there’s a variety of methods to go about it. If you’re curious about whether or not you must be on the internet to learn how to succeed by trading, we’ll be able to address that now. Let’s dive in:
1. Start an account with a stockbroker
In order to trade stocks, you’ll most likely need an online broker. No two brokers will offer the same benefits and opportunities. You’ll need to do your due diligence to find an experienced broker who caters to your specific needs
2. Crack open a few books
The written word can provide a seemingly endless and relatively inexpensive amount of knowledge about stock trading. Seminars, classes, and DVDs can be educational too, but books are the backbone supporting all of those concepts. The best part is, you don’t need to charge books or keep them connected to the internet.
3. Read articles
News articles are great for zeroing in on specific topics and concepts if you don’t have all day to spend in the library. Just like with every other field of study on Earth, the experts are more than willing to write about what they know and what they’ve learned over the years. Good articles about stocks are always in the newspaper.
4. Seek a mentor or a study buddy
If you have a family member, friend, coworker, teacher, etc., that already knows a thing or two about the stock market, take advantage of their knowledge and expertise. Find someone who can answer questions, provide resources, and encourage you to push past the hard times until you’re in a better place. The internet has countless forums where neophytes band together for support and information.
5. Start to follow the stock market
This is what it’s all about! Check out websites like MarketWatch and CNBC when you’re still getting your feet wet; they’re great for beginners. For a more advanced, deeper level of understanding, consider Bloomberg or the Wall Street Journal. The more you familiarize yourself with important headlines and breaking stories, the better your skills as a budding analyst will become. Don’t forget, a lot of these entities, especially CNBC, are also television staples.
6. Use a simulator to practice buying your first stocks
It doesn’t matter if it’s 100 shares, 10 shares, or even just one. Take the plunge and get started on an official, reputable platform. If you’re still leery about spending real money, there is all manner of virtual, simulated trading markets you can take advantage of. If you’re going to use the real stock market, make sure to deny the urge to purchase excessive shares. Minimizing risk is one of the most important concepts in trading.