How To Buy And Trade Stocks
Learning how to buy and trade stocks is fairly easy once you learn the fundamentals. Picking the right stocks to invest in is the hard part. Fortunately, it is a endeavor that a novice investor need not go at alone. Stock brokers and financial advisors are more than willing to assist and guide anyone entrusting their money with them. Some of the basic steps on how to buy and trade stocks follow.
- Determine how much money you are willing to invest. The first rule of investing is never use money to buy and trade stocks that you cannot afford to lose. Buying and trading stocks have risk factors which can result in financial loss.
- Consult with friends or relatives who are experienced in buying and trading stocks. Ask for recommendations in finding a stock broker or advisor at an investment firm with whom you can open a trading account.
- Open a trading account with a broker once you find someone you trust and feel comfortable with. You can also open an online trading account which gives you more control and access to your account if you decide to trade on your own.
- Decide the investment strategy you want to pursue. Are you looking for conservative long term investments that may have little risk, or short term investments that might be more speculative with bigger risks, but larger rewards? Buying and trading stocks is the most common form of trading activity. However, it is more risky than buying and trading bonds or mutual funds.
- Consult with your broker or advisor before making a trade. Determine if the stock you have selected meets your investment goals as to long term or short term.
- Place the order to buy. After you have placed your buy order, track the stock's performance on a regular basis to determine whether it is meeting your expectations.
- Do your homework. Learn as much as you can on how to buy and trade stocks by reading and asking questions from experienced professionals.