5 Ways to Learn Stock Trading From Zero to Success
5 Ways to Learn Stock Trading From Zero to Success
Everyone who plunges into the world of stocks, must be able to determine his position. Will he be an investor (buyer) or a trader (seller)? When deciding to become a stock seller and trade, there are several things that must be learned first so that trading activities run well and smoothly. Come on, see how to learn stock trading below.
What is Stock Trading?
Stock trading or stock selling is a common activity for those who choose to enter the stock market. A stock trader is a person who seeks to profit from the buying and selling of securities. Stock traders can become trading professionals on behalf of financial companies or individuals who trade on their own behalf. Stock traders participate in financial markets in various ways.
How to Learn Stock Trading?
Engaging in the stock market, as both an investor and a trader, requires an investment of capital and time, as well as research and knowledge of the market. There are 5 ways to learn stock trading, see below, OK!
1. Reading Books
Stock trading activities have been carried out by many people for a long time. There have been many successful figures born from stock trading activities and some of them have also shared their experiences through the books they wrote. Learn the steps they take when starting stock trading activities and adapt to your current conditions. Also read books that discuss stocks and investments.
Get recommendations for the best books for learning stocks including stock trading from experts and those who are experienced. You can get physical books or e-books that you can find on the internet. Also take the time to discuss with your colleagues or those who are experienced in the field of stock investment.
2. Determine Stock Trading Budget
One way that you can do in the early stages of stock trading activities and have an effect on your stock trading patterns later on is a budget. By determining the stock trading budget you use, it will be easier for you to calculate the profit you will get. Manage the funds you have as well as possible.
Putting more than 10% of your portfolio into individual stocks can make your savings unhealthy. So, make sure you only invest the amount of money that you have calculated and is still within a reasonable limit if you lose it. Do not use the money that has been allocated for short-term expenses such as daily needs, installment payments, and children's school fees. Also make sure that when you trade, you have a healthy emergency fund and safe retirement savings.
3. Don't Forget to Choose a Broker/Broker Account
After determining the budget that will be used for stock trading, you also need to choose a broker/broker account that affects the type of trading you will undertake. You cannot start trading stocks without a broker account.
A broker is a company that carries out trades on your behalf. Because they have great influence and power over your account, make sure the broker/broker you choose is a good broker/broker. Don't forget that the best broker for you will depend on your specific needs.
Each broker/broker has different terms in terms of fees charged as your share management commission fee. If you buy individual shares through a broker that charges no commission, you may not be charged anything.
However, when you start selling mutual funds, and other types of investments, you need to understand the expense ratio. The fund is managed by someone who is paid a percentage of the fund's assets each year. In addition to cost, you also need to consider your risk tolerance. A common method of risk assessment involves considering a hypothetical scenario where your investment suddenly loses 50% of its value.
4. Learn the Stocks to Trade
The task of having a broker is done, then it's time for you to decide which stock you want to trade. If you decide to invest in individual stocks, be sure to use some financial analysis ratios to compare the company's performance with its competitors. It takes precision and caution in selecting individual stocks. Using extensive comparative analysis can help ensure you add the best stocks to your portfolio.
5. Decide what type of trading is right for you
Determining the type of trade is the same as determining the direction of the road to achieve your goals. There are two main types of stock trading, namely active trading and day trading. Active trades are trades that the investor makes 10 or more trades per month. Typically, they employ a strategy that relies heavily on market timing, trying to take advantage of short-term events to turn a profit in the coming weeks or months.
Day trading is a strategy used by investors who play stocks by buying, selling and closing their positions of the same stock in a single trading day, The goal of day trading is to make a few dollars in the next few minutes, hours or days based on daily price fluctuations .
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