- When we talk about trading in the stock markets, it is the same thing and uses the same principle.Let me give an example from the share market.Say someone is doing a trade in shares of a listed company. What he/she is actually doing is buying shares (or a small part) of the listed company.
- So, if the value of those shares increases, then he/she will make money by selling them again at a higher price. This is trading in the share market.You buy something for one price and sell it again for another (hopefully at a higher price), thus making a profit on trading and vice versa.Trading in stocks can be financially rewarding if done in the right way. It involves riding the various ups and downs of the stock market.Now, let’s look into the various ways to trade in the stock market.
What is Stock Trading?
First things first, let’s quickly define stock trading. Stock trading is buying and selling shares of publicly traded companies. Popular stocks most Americans know include Apple (AAPL), Facebook (FB), Disney (DIS), Microsoft (MSFT), Amazon (AMZN), Google (GOOGL), Netflix (NFLX), and more recently listed companies such as Uber (UBER) and Pinterest (PINS).
In the stock market, for every buyer, there is a seller. When you buy 100 shares of stock, someone is selling 100 shares to you. Similarly, when you go to sell your shares of stock, someone has to buy them. If there are more buyers than sellers (demand), then the stock price will go up. Conversely, if there are more sellers than buyers (too much supply), the price will fall.
Some Great Ways to Learn Stock Trading as a Beginner-
For beginners who want to learn how to trade stocks, here are ten great answers to the simple question, “How do I get started?”.
1. Open a stock broker account-
Find a good online stock broker and open an account. Become familiarized with the layout and to take advantage of the free trading tools and research offered to clients only. Some brokers offer virtual trading which is beneficial because you can practice trading stocks with fake money (see #9 below).
2. Read books-
Books provide a wealth of information and are inexpensive compared to the costs of classes, seminars, and educational DVDs sold across the web. See my list of 20 great stock trading books to get started.
3. Find a mentor or a friend to learn with-
A mentor could be a family member, a friend, a coworker, a past or current professor, or any individual that has a fundamental understanding of the stock market. A good mentor is willing to answer questions, provide help, recommend useful resources, and keep spirits up when the market gets tough. All successful investors of the past and present have had mentors during their early days.
Despite being “old school,” online forums are still used today and they can be a great place to get questions answered. Just be careful of who you listen to. The vast majority of participants are not professional traders, let alone profitable traders. Heed advice from forums with a heavy dose of salt and do not, under any circumstance, follow trade recommendations.
4.Learn basics about the stock market-
The stock market functions on the basis of supply and demand. So, before getting engaged in any trade, you must learn about all the basics of the stock market.Keeping a track on financial news, listening to podcasts and taking up a course on investing are all excellent ways to become an efficient trader.
Practice with an online simulator on the stock market. Online stock trading simulators are a great way to learn online trading in a safe and efficient manner.Since it is a simulator, the losses you make would have no impact on you, hence you can learn the trade without any fear.
5.Make an investment plan-
To set a financial goal based on your risk appetite is very important to think through your investment strategies.Then make an advance decision on how much you are willing to invest in a particular company and set limits on the amount of loss you are willing to bear.If you adapt to all above mention points, online trading on stocks will be an easy and profitable task for you.The practice is the key to successful online trading.
0 Comments