Stock Market For Beginners – Don’t Get in Over Your Head
First off to trade on the stock market you will need to get a broker. Now if you’re going to be trading online like many people do nowadays this will be easy. All you have to do is pick one out of a long list and decide what it is you want from your broker. Major things that you need to consider are:Commission rates ($4-10)
Minimum balance required (usually around $500)
reliability/ ease of use
These are just the main things you want to look at. If you go with one of the major ones such as E-trade or Scottrade you won’t have too many problems. I find that the higher commission rates are worth it due to the increased customer support and research options.
Now that you have a broker and money in your account you’re ready to go and buy some stocks. Now do you want to buy, short or perhaps invest in put and call options, for what stock? So there is still a lot to learn but start off with setting some goals for yourself and your portfolio. Do you want to grow your account over many years or do you want to see returns right away? There are many approaches to the stock market and usually when there is a chance for increased gains the risk goes up as a result.
Once you’ve got some goals in place your one step closer to trading. Let’s start off with basic buying and selling share of a company. Let’s say you pick a company such as a solar panel company because you just had some installed and have read about their increased presence. Good so you take that company and find their ticker (an abbreviated name that is used on the stock market) let’s say company XYZ for simplicity. Placing an order is easy. Pull up your broker’s website and input their ticker, the amount of shares you want and the price you are willing to pay for them. The price of each share is not a set value and is determined by how much people are willing to buy and sell them for. The PPS (price per share) will fluctuate when someone pays more or less than the current share value.
So now that you have bought shares in your chosen company how do you make money? You make or lose money when the price per share goes up or down from your original investment. So if tomorrow the company receives some good news or got good revenue numbers back and lots of people want to buy in they begin to bid and this can cause people to raise how much they are willing to pay which increases the PPS and your investment (provided that you sell before the price goes down again) The amount of shares being traded on a day to day basis is called the Volume. You can use Volume as an indicator to how popular the stock is and to judge future movements.
The hardest thing for me to do was picking what stocks to invest in and when/ what price to get in at. It’s not an easy thing to do because if your judgment is off its your money on the line. This is my advice to you while you’re on the quest for learning don’t jump on any free penny stock promotional newsletters. I know too many good friends who lost their entire investments based on those letters.
If your looking for ways to help with picking stocks and people to help teach you to trade the stock market on your own then please look into this blog. This Site has a large resource of stock picking services and video lessons. Don’t be discouraged there is money in the stock market you just need some training before investing on your own.
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