Jon Harris, Landshark Staff Writer
Trading in the stock market can be very profitable if you can keep your losses to a minimum. Educating yourself on the stock market requires discipline, determination, patience, and a deep understanding of stock trades. If you plan to trade stocks successfully you should be aware of the risks you may encounter, and understand which market categories are best for you. Following stock market prices and indicators regularly will help fuel successful stock trading. Here are some key tips to help you before you begin investing and trading in the stock market.
Key tips for learning how to Trade Stocks.
Before you begin trading stocks you should have a goal or plan set in place so you can stay focused. Trading stocks can be confusing and overwhelming for new stock traders. New stock traders should make sure they have their finances in order before they begin trading stocks. It’s best for you to focus on paying all of your bills, clearing your debt, fixing your credit score, and having a set amount saved to the side so you can begin trading stocks. If you have a goal to pay off a home, or car for example then you should have an established time frame set in place. Once this is done you can begin selecting stock marketing investments to help accomplish your goals.
2. Organizing Stock Portfolio
New stock traders should start off slow and choose each of their investments very carefully. Beginning with up to 20 stocks that you have thoroughly researched is a good start. All stock traders need to be aware of risks and focus on stocks that can combat risks that may concern you. Staying cautious about stock market trades and investing in different stock market categories will help minimize different risks that come with investing. Investigating and educating yourself on all different stock market/stock sector categories should be done before you being trading trades. Having a limited stock market portfolio is easier to manage so it will give you time to learn each stock and about each companies underlying financials. This will also give you time to learn about large-cap, mid-cap, small-cap and international stocks.
It’s important to learn important stock market terms that are used to evaluate the current stock market. Important stock market terms to learn for example would include compound annual growth rate (CAGR), price-to-earnings ratio (P/E ratio), or return on equity (ROE) which can establish the inner workings of a stock, and help guide you toward making a decision with your investments.
For many of the Landshark students they rely on a combination of market fundamentals and technical analysis to make buying and selling decisions.
4. Know where to buy stocks
Stocks can be paid for online through the use of stockbrokers. Pay a well-known stock broker is the easiest way to trade stocks. Stockbrokers will place your stock trades for you, and provide you with important advice. Using traditional stockbrokers will have more trade execution fees which will cost you. You can easily trade and manage stocks online with various online trading platforms. Trading stocks online will give you full control of your stock trades, and save you money.
5. Efficient Stock Trading
- Focus on companies that have lower capital needs which can prompt higher returns. New stock traders should avoid companies that require more capital, and companies that may not even be around 5 years from now.
- Invest in successful companies with a surplus of cash flow. Companies with strong financial resources are likely to keep growing which is beneficial for shareholders.
- At Landshark we provide students with the 'Landshark 50 Stock List' which is in the CORE Foundations of Trading Program.
- Store your money in between trades. Brokerage firms allow you to store your money which will gain a little bit of interest for you over time.
- Keep money in your account. Many online stock trading platforms require you to have a set amount of money just to open an account. Federal regulations require that you have at least half of the cost of the stock you’re purchasing in your account, and the equity for your investments cannot be any less than a quarter of your total stock investments.
We hope you enjoyed this article.