As a beginner, you need all the basics of stock trading before diving deeper into it. Without these basics, you may be doomed to make rookie mistakes leading to loss of potential and money. However, quality education will allow you to do trial and error with the ability to learn from your mistakes and success.
A good advantage of stock trading is because it can last for a lifetime. Investors like us have years to develop and improve our skills. In fact, strategies used decades ago are still used today. Here are a couple of tips that will help you navigate the ins and outs of trading the right way.
1. Open a stock broker account
Start by finding a good online stock broker and create an account after which you can begin by familiarizing yourself with the layout and take advantage of the many free resources offered exclusively to premium clients. Many brokers provide virtual trading that’s important since you can play money. A great tool and resource for brokers can be found at eastern-sec.com.
2. Find knowledge resources
There are many books that offer a lot of wisdom and are cheap compared to the costs of classes, educational DVDs, and seminars across the web. One example is Seth Klarman’s Margin of Safety that explains how value investing can help one succeed in the stock market and prevent major economic loss. Kailash Concepts has written a review on the Margin of Safety book which you can visit here.
Forums are also a good source for real-time question and answer. Two recommendations include Trade2Win and Elite Trader. As always, be careful of who you listen to since the vast majority of participants won’t be professional traders or even profitable traders. Take every advice with a grain of salt and do not, and be extra vigilant when you want to follow trade recommendations.
3. Get yourself a mentor
This mentor could be someone you know like a friend or family, a co-worker, a previous professor, or a professional who have a fundamental understanding of the stock market. A good mentor will be able to answer questions, offer help, recommend good resources as well as keep your spirits up during bad times. Every successful investor I know has had mentors that helped them get to where they are.
4. Learn from the greats
Looking up and learning from those who already made it or more specifically about the greatest investors of years past can provide you with perspective, appreciation and inspiration for stock market game. Greats include Warren Buffett, George Soros, Benjamin Graham, Jesse Livermore, Peter Lynch, Paul Tudor Jones and John Templeton, among others.
In all honesty, you’ll never know enough or know if the stock investment is right for you until you take the plunge. With your online broker account setup, the best way to begin is just to actually do it and start your first trade. It’s fine to start small, a couple of shares will serve its purpose of getting you in the game.
Lastly, research well and transact only with an industry-leading or a top stock broker as this will give you the advantage of a better platform and better resources to help you reach the ladder top.