The stock market is one of the very few businesses in which you can double the money you invest. It can be multiplied or you can lose all the money you put in. The only thing you need to do is after thinking about it, whether it is buying or selling. Everything you need to know about stock market trading and how to start stock trading is here.
What is stock market?
According to Wikipedia, the stock market, equity market or stock market is the aggregation of buyers and sellers of stock (also called shares), who represent ownership claims on businesses. These shares are the index of the company’s shares.
You must have heard on the news that the stock went up or down, it means that the index of the company is going up or down. Various people invest in buying these shares in exchange for money. When you buy these shares, it means that you are buying part of a public corporation such as a bank. It works like an auction in which you need to bid for the stock you bought. If you think the company’s index will go down, then bid high otherwise bid low.
Traditional vs Online Trading:
Both traditional and online trading have their share of advantages and disadvantages.
It is up to you which one works best for you. Here is the difference between the two-
|traditional trade||online business|
|1. Limited to the clients you work with.||1. There is no such requirement.|
|2. Its cost is quite high as compared to online trading.||2. Slightly lower cost|
|3. Limited free trading is offered to clients with large cash reserves deposited in a brokerage firm or linked bank account.||3. Some online companies offer a large number of free trades each quarter, although others charge almost the same fees as traditional brokerages.|
|4. Timings for this market are limited from 9 AM to 4 PM.||4. This market is open 24 hours a day.|
|5. You can get guidance from the broker.||5. No use of guidance|
|6. You get less resources for reference as compared to online trading.||6. You get more resources like issue date etc.|
|7. Not as fast and time consuming as compared to online trading.||7. Quick and less time consuming.|
Why should you start trading?
1. For an additional income:
There is no need for you to leave your current job to start trading. If you are a businessman or even a student, this source can prove to be an excellent way to give you extra income as it is a passive income method. You can do business from the comfort of your home. Imagine having breakfast while earning side cash. Isn’t this amazing? To me, it sounds wonderful. Even if you are a lazy person like me, you can do business from the comfort of your home.
OK, this may sound like fantasy, but when your money has multiplied, you can lie on your couch. Of course, you also have to calculate the risks.
2. Many options to choose from.
In stock trading, it is up to you to choose as many fish in the pond as you can either invest in forex trading, futures trading, equity shares etc.
3. Develop emotional stability.
Now what I mean by emotional stability is that you will learn to control your emotions. One thing I have learned in stock market trading is how to deal with losses. Dealing with losses gives you the strength to get back on your feet to try again.
4. There is no need to be a genius.
I have seen many times that the proof of education matters more than the knowledge you acquire. It doesn’t matter which area you go to. If you need to grow you need to learn new things. After Bachelors there is more scope for those who have completed Masters and this trend continues. We have all come across businesses that require education to be successful but the stock market doesn’t really require education. All you have to do is familiarize yourself with the terms and conditions and know the process. The more you spend time on it, the more you grow.
5. Money will increase on investment.
When Ariana Grande said- “Whoever said money can’t solve your problems shouldn’t have enough money to solve them” I felt it. Money is important in almost every aspect if you dream of leading a comfortable life ahead.
Many of us save money and keep it locked up somewhere. Well, the money that is lying around is useless. Start investing that money in good companies. Then all you have to do is multiply the amount invested by you while you relax or focus on something else.
6. Your business expands.
If you are a businessman looking to expand your business or want to acquire investors, then the stock market may be an option for you. The more your company wins, the more you grow and the more connections you make. Not only this, through this market you can get a chance to get international investors.
How to start online trading?
1. Get acquainted with the things related to the stock market.
I’m not asking you to learn anything here, it’s like reading or watching a video about something. If you want to become an expert in this field, you need to be patient and start with the basics. You can read about stock marketing or take a course (which is like 1-2 hours and I don’t think it is too much).
You can also search for stock marketing by going to YouTube, where you will find a lot of people who are teaching you the whole process.
2. Choose an online broker.
Once you have learned that, the next step is to choose a broker according to your needs and area of interest. A broker facilitates trading between market participants, allowing you to buy stocks from sellers and sell stocks to buyers. You need to find an expert who is reliable and has good reviews. Since you are investing all of your capital here, be sure to double-check the company.
3. Start researching stocks.
You have an account and an investment and you are all set to trade. What you need now is stock. Most traders begin by doing a thorough analysis of a company, looking at public information including earnings reports, financial filings, and SEC reports, as well as outside research reports from professional analysts. Most of this should be provided by your broker along with recent company news and risk ratings. Don’t invest all your money. Start slow and progress slowly. Only then can you learn to handle risk.
4. Make a plan and stick to it.
Well, this is the most important thing for you to know. I have already explained that there is a huge risk of losing money in the stock market. No one likes to see their money run out, so my only advice is to invest only the amount you are willing to risk. What I mean here is that you can invest all the money you like, but only if the situation is reversed you can lose money. This risk factor diminishes once you start getting experienced but you can never be risk free, there is no way you will not travel.
5. Don’t be greedy.
Recall how Monica starts investing in stocks with her initials in the TV series Friends. She is successful at first but then she gives her all and unfortunately she loses all the money. Remember that being greedy is something that can spoil your chance of earning money through this sector. You just need to be patient.
still confused? Here are the best frequently asked questions
Open a stockbroker account. … Reading books. … read the article. … Find a mentor or friend to learn from. …study successful investors. … read and follow the stock market casually. …
Best Online Stock Broker for Beginners: TD Ameritrade: Overall Best for Beginners. E-Trade Financial: Best for Mobile App. Ally Investing: Best for the digital experience. Merrill Edge: Best for minimum investment of $0.
The short answer is yes. The long answer is that it depends on the strategy you plan to use and the broker you want to use. Technically, you can trade with an initial capital of only $100 if your broker allows.
5 Steps to Start Trading Stocks Online Decide if this is the right strategy for you. You may consider trading stocks if: … get an education. Before you trade anything, learn all about investing and the markets. … Choose an online broker. … start researching stocks. … make a plan and stick to it.
I hope you enjoyed reading this article and I hope you have some idea about stock trading or share market.
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