Based on the image that exists in the public, the world of the stock market can seem mystical and unattainable to many people. Of course, this is not like that at all. In reality, trading on the stock exchange is a way of earning money that is available to everyone nowadays. But, how to begin with stock trading, and more important: So how to survive in this business? We’ll try to at least make it easier for you.
Stock Market Trading Now And Then
Stock market trading is no longer just the privilege of brokers and financial experts. Everyone can buy and sell on the stock exchange, and you don’t need to have any diploma or any special education. In the past – when informatics was not yet at such a high level as today – stock exchange trading took place at a specific physical location. It was the stock exchange market – the same one as you have seen in the movies. Nowadays, in the age of the Internet, we have no physical restrictions on stock trading. Nowadays, thanks to the Internet, trading can be conducted from a great distance. To start trading, we need to have one computer and an internet connection, and there is already the possibility of trading via mobile phones.
How Much Money Do We Need To Have For Stock Trading?
Doing business on the stock market today is no longer just the privilege of rich people. It is possible to trade efficiently with relatively smaller amounts of money. The general recommendation is that you should start trading first on the virtual, the so-called demo account – and then with a smaller amount on the real account. The key to success is gradualism. It is the right approach to trading. Just like when you’re learning to swim. First, you practice in the shallow waters – and when you notice that you’re doing well, you gradually move into deeper waters. The same rule applies to stock exchanges.
How To Start Trading On Stock Market?
Stock trading is quite a simple process. We buy shares (or other products) when we see a buy signal on the chart – and we sell them when we see a sell signal on the chart. Therefore, the main task of the trader is to recognize these signals and to take appropriate steps based on them. Since there are several types of buy and sell signals – we can completely adapt the way of trading to ourselves. This means that we can buy and sell based on those signals that we most easily recognize. That will be our trading system.
The Difference Between Beginners And Professional Stock Traders
This is not so difficult. Serious stockbrokers easily recognize beginners because they make some typical omissions – and they are characterized by traits that professional stockbrokers have overcome long ago. You must know how to recognize a beginner on the stock market:
- The beginner finds trading extremely easy. That is why he doesn’t put too much effort into education. He reacts very emotionally to every price shift. He doesn’t look at the market context, and he doesn’t even know what it is. In most cases, he thinks he is right – and finds it difficult to change his point of view.
- The beginner has no trading plan at all. He opens positions impulsively or when he has time for that. At the same time, he knows how to use only one strategy and applies it to all market circumstances.
- He is only interested in big profits. He is not patient and expects quick results. He wants to double the amount in his account in a short time.
Unlike beginners, professionals stick to the following:
- They humbly approach the market because they know they can never know enough. They are constantly educating themselves because they understand that it is very profitable. They observe price trends in a market context – and they are ready to adapt to the market and accept if they are wrong.
- With a true professional, the trading strategy is flexible and adapts to market conditions. He takes less risk and opens more positions in parallel.
- A professional stock trader is ready to stoop for smaller profits – not just aim for big money. He specializes in only a few instruments – and is a professional in handling them. He is patient because a long-term goal hovers before his eyes. Risk management is his top priority because he knows he can only influence it.
How To Survive In The Stock Market In 2020?
Fast money is what mostly attracts young people who want to succeed in the business world and the stock market. However, so many pitfalls and curves can make your trip to the stock market very short-lived. So how do you survive on the stock market if you are already involved in trading?
Create A Stock Portfolio
Before you enter the stock market waters, you must examine what currents rule there. There are a lot of free portfolio managers on the internet, so use some of those tools to create a free account. First, you should create a fictive portfolio with shares in which you would potentially invest and monitor the situation for some time. According to stockportfolioorganizer.com – you can practice analyzing your gains and losses, see your incomes, etc. This is the best way to gain insight into market instability. Before making the first step, your goal is to create a profitable fictitious portfolio and practice a lot. Then you are ready for the real stock market, and the trade can begin.
Realistic Expectations Are Very Important
There is nothing wrong with always hoping for the best – but there can be problems if your goals are unrealistic. Be realistic in your ambitions and goals – so you are less likely to lose money or be disappointed in the stock market business.
If You Take A Risk, Use Money From Reserve Funds
If you opt to take a risk in a market that is as unstable – then make sure that those risky investments come from the surpluses you have earned through safe investments – or from reserve funds. So, it should be money that you can afford to lose. It doesn’t necessarily mean that you will be at a loss. On the contrary, the risk can bring big profits – but it is about the fact that you should be prepared for the option that it will not pay off.
Don’t Try To Predict The Price Of The Stock In The Future
Finally, one of the most important rules of survival on the stock market is not to try to predict the price of the stocks and how it will move in the future. Not even the biggest players don’t do that. No one managed to go ahead of time, at least not for a long period. Guessing the moment when the stock has the greatest value, and when the downfall awaits it – is still just a myth. Even for those who have an insight into the business of some companies.
For successful business on the stock exchange, you need to acquire certain prior knowledge and skills. According to research, young people who have just graduated from college usually take the risk of investing. But, as in any other business – the experience you gain will help you to be wiser in making decisions in the future.