If you’re unfamiliar with how the stock market works, or if you just started learning but never got around to actually investing, stock trading can be intimidating at first.
The truth is, with the wide variety of tools at our disposal today, trading stocks successfully has never been easier. However, that doesn’t mean stock trading is a walk in the park and that everybody who gets in will make it.
But with the proper set of resources, almost anybody can start trading successfully, even if those resources are limited. Here are the steps you need to get through to become a successful investor.
Get The Knowledge
The first thing you should do is get a solid foundation before you get started. There are tons of different ways to approach the stock market.
Some will follow prominent analysts and copy their strategies. Others prefer to go with their guts and trade the news. Others might prefer to go with in-depth analysis.
Most online brokers will have an educational component that will teach you the nuts and bolts of the stock market.
Some of them will even have offices where you’ll be able to discuss with an expert one on one. Or you could go on trading forums and discuss with other expert traders and soak in the knowledge.
Choose the trading style that works for you, invest what you can afford to lose, and don’t be afraid to make mistakes.
Find a Good Online Broker
There are tons of great online brokerage services that will allow you to make trades.
You have the choice between discount brokers and full-service brokers. Full-service brokers will usually cost much more but will come with many more advantages.
A full-service broker might give you suggestions on individual stocks, provide added research, and give you more one on one attention. But they’re usually not the best if you want to make a lot of trades.
A discount broker, on the other end, like eToro for instance, will usually be a better choice for new investors. eToro is a social trading platform that combines the benefits of a full-service broker by giving you access to tested and true leading traders enabling you to copy their strategies while offering low fees on trades.
Social trading is bar none the easiest way to start trading stocks and allows you to try multiple strategies and finding one that works the best.
Know What Kind of Trader You Are
There are usually two types of traders: those who like to hold onto stocks they believe are promising and get paid off dividends, and those who’d rather trade based on market movements and volatility and make quick gains.
If you’re that kind of trader, then you should be looking at a broker with low execution fees. But if you’re more of a holder, then a full-service broker might be the better option.
Trading doesn’t have to be intimidating, and with the proper knowledge and expertise, it’s possible to make good gains with the proper strategy.
Make sure that you stay disciplined and never stop learning and experimenting, that’s the only way you’ll actually become a successful trader.