How To Start Trading For The First Time
Events of the past few weeks with stock tip forums and crazy wealth created instantly from seemingly worthless stocks has fueled a new generation of investors to try their hand at what is increasingly becoming just another casino game. Real investing and stock market trading takes time and effort and your risks will be rewarded. The challenge in today's market is that people who aren't willing to take the time to learn how invest will be lured into a sense that it's just easy money ... until it's not.
Many of us dream of making it big investing in stocks and shares - taking control of our finances, breaking free from the demands of full-time employment and having the freedom to make money anywhere, at any time. However, this isn’t something that simply happens overnight. In order to trade successfully and to reduce the significant risk of loss, we need to take time to learn the intricacies of this fast-paced world, getting as familiar as possible with the behaviors and patterns inherent to the market and developing our own approaches, tactics and boundaries. In this article, we explain the most sensible way to get started as a trader of stocks and shares in order to have the best experience possible.
There's nothing wrong with taking tips and discussing ideas as long as you do it legally. However, true success over months and years takes skill as well as luck. Here's how to start with day trading as a side hustle to make some extra money or potentially allow you to quit your job and work from home.
Before you do anything else at all, you need to read and learn everything you can about investing. Make sure that all of your sources are reliable and verifiable, as many may contain sales tactics that may throw you off the scent. Compare the various platforms that provide stock market data to work out which best fits your preferences, then start scrutinizing that data religiously. At this point, you should also consider exactly where you would like to invest. There are various different markets available, including:
- The New York Stock Exchange
- Electronic Communications Network
- Over the Counter
- Foreign Exchange Market
It’s best to study each, pick one and stick to it to avoid spreading yourself - and your funds - too thin.
Make an Account
As you start to build a picture of the inner workings of the stock market and your potential place within it, it’s time to sign up to your chosen trading platform or app. These resources offer a range of different features - such as money management tools, portfolio tracking resources and even trading simulations to help you refine your technique without risk - so be sure to compare these as well as the fees involved.
Set Your Limits
It’s important to decide on budgets, schedules and precise fields of investment specialism before you really delve into the world of the stock market. If you make a start without doing this, it’s easy to get sucked in; taking greater and greater risks, spending more and more and spending many hours poring over the tiniest movements. At this point, you should think about your tactics and techniques. Will you trade out of hours or at peak times? Do you have the time at your disposal to be a short-term trader, or is long term trading more achievable (this is likely to be the case if you are currently in employment)?
If you are eventually planning to trade full-time, you might decide to aim for extreme short term or day trading. This tactic involves buying and selling the same shares within a 24-hour period, and relies on the investor being able to constantly keep track of the most minute adjustments within the market. Knowledgeable day traders with strong tactics are often able to turn huge profits - but there is always the potential for significant loss, which is why it is vital to get started in the strongest way possible.
- Written by James Hills
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