Stock market trading is an often confusing and complicated process. That doesn’t mean that it can’t be easy for beginners to understand, though!
This blog post will outline few rules that every beginner trader should know before trading stocks on the stock exchange. In addition, you’ll learn about a variety of topics, from how to make money in your first trade to what you need to get started.
Rule #1: Make Sure You Have a Brokerage Account
The first step to trading stocks is opening up your brokerage account. The brokerages that you will want to explore will depend on what types of investments you’re interested in, how much money you have, and what type of trader you are.
Once you’ve narrowed down the list of potential brokers, it’s time for some research! First, read reviews from other traders about which one they like best.
Then see if any affiliates would be willing to give their opinion (this should only add credibility) or join an online forum where people talk about subject-related questions and issues with the stock market all day long. One good site for this is Reddit (/r/stockmarket).
Rule #2: Know When to Buy and Sell Stocks
It’s important to know when the best times are for buying stocks to not lose out on any potential gains.
The opposite goes for selling- at some point, and stock will peak and make its descent down the curve of pricing movements (also known as an “upside correction”), which means now would be the perfect time to sell!
You want to avoid letting feelings get in the way of trading because people often buy more than they should or wait too long before selling their stocks.
Rule #3: Know Which Markets You Want to Trade-In
There are many different markets that traders can choose from, but the two most popular ones are penny stocks and forex/foreign exchange trading.
The first one is great for beginners because these types of companies often have less than $50 million worth in assets, and they’re usually more volatile (meaning you’ll see higher returns).
Forex, on the other hand, trades between global currencies- it’s much more stable with lower risks when compared to stocks, so this might be better suited to someone who has been trading longer without seeing as many gains yet.
Penny stocks should only ever make up about 20% of your investment portfolio since there’s such a high chance that things could go wrong.
Rule #4: Monitor Your Investments
Once you start investing, it’s important to be able to monitor them regularly. This can depend on what type of investor you are- for example, if you’re more risk-tolerant, then checking in once every few months is fine because the ups and downs will even out over time.
However, if volatility doesn’t bother you but instead scares the living daylights out of you, monitoring your investments daily might be better suited for that particular situation.
Of course, it all depends on how much control or input an individual wants when trading stocks, making sure this one fits with how comfortable they feel!
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