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How to Start Trading Stocks

investment stocks trade Oct 24, 2019

 

A lot of people invest in stocks.

Stock investing strategies are as numerous as the number of people investing in stocks.

Everyone has a different strategy based on the outcomes they wish to achieve.

  • There are those for whom stock investment is a part of their retirement plan and hence their Individual Retirement Account (IRA).
  • There are others who buy shares and keep them for a lifetime, making a regular income through the dividend.

People become part of the stock market based on different priorities.

There is, however, another notable class that remains part of the stock market. They are people who do stock business on an everyday basis.

Their only job is to buy and sell stocks.

These are the people who are not simply investing in stocks like many others are doing. They are, in fact, trading stocks and are the stock traders.

They are involved in stock buying and selling more frequently than other people. They constitute a separate business class and their business is dealing in stocks.

 

 

What Makes You a Stock Trader?

By buying a stock, keeping it for some and selling it afterward, you do not become a stock trader.

You can be called a stock investor in such a case.

It is the intensity and frequency of your stock activity that makes you either an investor or a trader.

For you to be a stock trader there should be at least ten buying and selling transactions from your online brokerage account (if you are availing an online broker) in a month.

This is the bottom line of being a stock trader.

There is another category among the stock traders who trade stocks as quickly as in a day.

They buy and sell stocks within a day. They are known as day traders.

  • Being a day trader is risky. You cannot become a day trader in a day.
  • You cannot even become a stock trader in a day.

This is a career that begins with being a stock investor. Then with time, you may switch to stock trading.

For this, you will need to learn the stock market fully while you are still a stock investor.

 

Your Way into Stock Trading

 

 

If the stock market appeals to the adventurous soul in you, you should seriously consider stock trading as your long-term career objective.

But you have to go up this climb slowly.

  • In the beginning, learn as much as you can. Invest in penny stock trading courses to start out with. 
  • Choose a market that interests you and it is easier for you to understand.
  • Get exposure to the companies around you operating in that market.
  • Look into the annual audits of the companies and their management teams.
  • Talk to people who are already in this business. There are numerous options when looking for initial penny stock coaching offers. 

You can be lucky to come across people who are dealing in stocks in exactly the market you wish to start your journey from.

  • Expose yourself to as much stock news as possible.

As a beginner, look into how the stock market works. When you feel you have read enough, the second step should be to practice virtual trading.

For this, open up an online brokerage account. You can find a trustworthy online broker through financial review sites. Online brokers extend you the facility of paper trading with none of your money involved. In this way, you can safely do some practice.

After this stage, you are sufficiently prepared to invest money.

One very important thing about making an investment in the stock market is that you should always invest an amount that you can afford to lose.

The stock market is unpredictable and a company can suffer losses overnight.

Be very careful and start your ride with a safe amount.

Initially, you will do buying and selling at a slow pace. This will help you learn patterns. You will discover some recurring patterns in the market. Your strategy should be based on exploiting these repeating patterns.

This will be a secure play area in the field.

 

Day Trading

The final step in your growth as a stock trader will be day trading.

However, you may not choose to indulge in day trading at all.

Not all stock traders do day trading.

Like we mentioned earlier, day trading is risky.

Unless and until you have learned to manage risk, we will advise you not to be a day trader. Losing a hefty amount of money in a day has the potential to put a full stop to your career. So be very vigilant while opting for day trading.

  • Do not jump from one market to another in your day trading.
  • Learn to remain consistently in one market.

This will make you more informed about the everyday stock exchanges of that market. This information will make you successful as a day trader.

  • Working as a day trader will require you to have your smart gadgets active all the time.
  • Having a laptop and a fast internet connection is a must.

It is advisable to do your job through an online broker. This will save you time and mobility.

 

Ideal Times for Day Trading

 

Day trading should be like any other job.

  • You should not be sitting in front of your laptop the whole day. You should fix some hours for yourself to do day trading.

However, you can be a little smarter.

  • Subscribe to a reliable financial news site that covers the market in which you are day trading.
  • Keep the alerts and notifications active from that news site. This will ensure you do not miss any great opportunity for trading during the hours which fall outside of your usual work time.

You must be thinking, what should be my usual hours for day trading?

The best time is the morning time when the stock market opens.

Some two to three hours in the morning will serve you best. But if you have a morning job, you can avail of the closing hours of the stock market.

Again take advantage of the closing two to three hours.

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