Trading stocks is an activity designed to generate profits by trading on the stock exchange of different financial instruments, like stocks, bonds, options and many more.
It can be a profitable approach to make money online, but is risky and not for all.
Time ago to invest in shares you had to go physically in bank or entities authorized to the purchase and sale of equities.
The discovery of internet has made the methods of doing businesses very easy and comfortable and trading stocks is one of the business that benefited from the web.
Now people around the world with trading online can easily invest in the U.S., Japan or U.K. stock market simply standing in front of a pc with internet connection.
How Trading Stocks Works
Trading online is surely a risky activity, both for those who practice it from time to time, without an appropriate methodology, both for those who devote much time and has come to make their work, studying and supporting it with advanced trading tools and systems.
It i’s well known that most traders lose money and a fair percentage of them are even forced out of business within the first year of operation.
This is mainly due to the fact that many take the wrong approach towards this discipline, that is complex and difficult, not suitable for everyone.
Trading is an activity that requires knowledge, study, dedication and discipline, but also a lot of experience.
You will need a broker, that offer you instruments and services trough which you can trade stocks.
The stock trader is usually professional and experienced people who know what they do, but with some testing period, learning strategies and practicing them, you can think about start to invest some of your money in financial market.
There are many people who have been successful in making out huge amounts from the online stock trading.
Tips to Make Money Trading Stocks
Check out these following tips that can help you with Trading Online :
1 – never invest the money you need to live : I think this is the most important rule and tip. Invest only an amount of money that you can consider to lose without risky your right to eat every day;
2 – analyze your own financial situation : are you looking to make money now or long-term? How much money will you be using? What kind of risk are you looking for? These questions will determine things like what stocks you will be looking at and the price range you want to be within ;
3 – analyse the stock : you must study the company numbers (this is called fundamental analysis) ;
4 – stock chart reading : as an investor you will want to check out any equity before you buy it and study the historic prices (this is called technical analysis). If you can master the chart reading, you can easily discover and judge the stocks that will move up ;
5 – stop Loss : when you make a wrong action,be aware of the error and cut losses. Basically one of the tactic of the trade is remove the loser and let the winner continue, making you earn ;
6 – hope of recovery : you should never purchase the stock which is dropping down with a perception that it will increase suddenly after you will purchase it. Look for stocks that are moving up constantly. Another financial trading base is “buy low and sell high“ ;
7 – never listen media news : you should never give an importance to the media personalities rather it is recommended to work independently while trading online. When the time information of the media reaches you, it becomes too late. Use your own brain ;
8 – choose the right broker : you should always look for the brokers whose commission share should be low or you will risk to spend all your money in the brokers fees and commission ;
9 – test your strategies : before invest real money, run some simulation for a certain period, testing your action. This will save you a lot of money.
In any case, use a logical approach, sensible and above all disciplined when placing orders.
You do not have to be influenced by fads or advice of friends and acquaintances who improvise, or traders on economic and financial experts.
Always follow your own personal strategy and meet the targets set in advance, both in terms of earnings, both in terms of loss (stop loss).
Learn as much as possible.
And if possible start a course which teaches you the first steps in the financial markets or, if you already know the operational tools, more advanced courses to learn new techniques of negotiation tactics and strategies, through technical analysis.
The cultural background of the trader is an essential weapon for the operation of business of trading success.
And remember, in the stock market, any strategy that makes money is a working one.
Good luck finding yours !