Planning to start a career in stock trading? Don’t know how one can get their feet wet in stock trading? No fuss, this blog post is going to be helpful for you. But before we go any deeper into the topic, let’s get familiar with Stock Trading:
As its name suggests, stock trading involves buying and selling stocks to earn a return on investment on daily price fluctuations. It’s an ideal choice for short-term traders who want to bet for a short time. The main objective of stock traders is to get the most out of market events to sell acquired stocks for a profit or buy stocks at low rates. There’re two main types of stock trading: active trading and day trading.
How to Start Stock Trading?
Open a broker account
Stock traders are required to fund a brokerage account, which is specifically designed to hold investments. If someone doesn’t have a brokerage account, he/she can open one in just few minutes. Opening a brokerage account doesn’t mean you’re risking your money. It just provides you with the option to do so when you are ready.
Set a budget
For beginners allocating more than 15% of their portfolio to individual stocks can make your savings more susceptible to volatility. Invest only what you can afford to lose and don’t use funds that are reserved for near-term and must-pay expenses.
Learn using market orders and limit orders
After you’ve set up your broker account and determined your budget, you are all set to perform your stock trades using an online broker’s trading platform. You will be provided with different options for order types. The most common types include market order and a limit order.
First practice with virtual trading account
Before you start performing stock trading, it’s important that you first practice with a virtual trading account to get your feet wet in stock trading. This will help you a lot in avoiding potential losses.