Stock Trading For Beginners

So, you’ve finally taken the step to enter the world of speculations, risks and investments! Stock trading is not only about making money. It’s about devising strategies, following them and taking right decisions at the right time.

You, being a rookie trader, need to be aware of certain strategies and should know how the market reacts to certain conditions and news. Here’s a stock trading guide that you, as a new trader should be aware of:

Don’t Expect Profits in your First Trade

First and foremost, take off your rose colored glasses. You won’t start earning as soon as you invest. Your profits will start only after you’ve chosen the right strategy and have implemented it in the right way. Before you invest a single dollar in the market, find out your trading style and learn which strategies are profitable and how you can implement them.

Discover your Risk Appetite

Are you willing to invest all in the stock market, without implementing a stop loss strategy? Or do you think it’s better to invest according to your capital? Answers to these questions will determine your risk appetite; the risk you’re willing to take with stock trading.

Choosing stocks for investment is a part of discovering your risk appetite. There are stocks that are risky, i.e., they have equal chances of earning a huge profit and a huge loss. Then there are stocks that offer a low but standard amount of profit. Invest according to the risk you’re willing to take. 

Start with Safer Stocks

Blue chip and hot stocks offer huge profits, but stay away from them if you’ve just started trading. They’re for the pros as they’re aware how they perform and move in the market. Your first few trades should be with the safer stocks i.e. stocks that offer standard, but low profits. Build confidence with these stocks and then move towards riskier ones. But, even then, keep in mind not to invest a huge percentage in risky stocks. You might end up losing.

Practice your Trade

So, you’ve read about 10 articles on trading over the past three days and you assume that you’re ready to trade? Well, that’s certainly not possible. Stock trading is a trial and error process that you can only learn when you actually trade.

So, before you start trading the actual market, practice stock trading virtually. There are a number of companies that offer a virtual stock trading platform to help new investors like you to devise strategies, test its effectiveness, and then enter the market prepared.

Log on to Investfly to learn different stock trading strategies for trading the market successfully. The website also features stock market games that make trading lessons fun and enjoyable.