Investing in the stock market for a beginner is scary, exhilarating, and very confusing. There are many things you need to learn in order to make good money in an uncertain stock market.EDUtrade
Five easy steps to lead the novice in the world of stock market investing begin with common sense and logical events.
Open a trading/investment account. Online is the easiest and most convenient. You can go to several reputable discount stock brokers. They do charge a fee, but also give you expert advice and notice of up and coming prices and trending stocks.
Try speculating in penny stocks for practice. Choose a broker who can guide you through these stocks. You will also use the same broker when you transfer to the actual stock market.
Fund your investment account. The amount you need to fund depends on your goals and time frame to reach these goals.
A novice in the stock market game who wants to create a retirement income by building a portfolio of dividend paying stocks can begin with $2,000. Just keep adding money to your account on a regular basis and you will soon have a solid stock market account.
If you want immediate income you will need to employ short term trading strategies and start with quite a bit of money. Do, however, that it takes experience and knowledge in the basics of stock market investing to be successful at immediate gains.
Create a watch list of companies where you want to invest. Your goals and time frame will be the deciding factor where you place your trust.
Do understand that when you purchase stock of a company you are taking on its credit risk. In other words it the company fails while you are holding stock you shares will become worthless.
This is a risk that your broker should steer you around. Do not invest in fledgling companies unless you have the capital to lose.
You might want to invest n EFTs in the beginning. There are EFT or exchange traded funds tht cover every stock market section. EFTs are not as risky as regular stocks.
Develop a winning trading strategy. This mean looking for a trading strategy that reports a gain of 50% of the time and also generates gains that are three times the size of their losses, it is a profitable stock market strategy. Discuss this with your broker.
If you are going to “play” the stock market and move in and out of stock positions on a regular basis you may want to paper trade until you are comfortable with your chosen trading strategy.
Paper trading is not like trading in real time with real money. It is a practice type of strategy. Do this for a period of time until you are comfortable with your own ideas and knowledge.
Novice or experienced stock market trader, it might be wise to plan what you can lose. If you cannot afford to lose a certain amount of money, trend your goals a bit lower. The best stock market advise is invest only what you can comfortably lose.