A Stock Trading Beginners Guide

Stock trading can be lucrative, but there is a huge amount of potential for money to be lost if it’s not done carefully. Those who are new to stocks may be worried about whether it’s worth jumping into, whether they can make money, or if it’s just not the right option for them. Check out the tips here to get started, and learn how to do everything right to minimize the potential for losses.

Stock trading beginners guide - image for article 54993939Decide How to Invest in Stocks

How to invest in stocks is a crucial first decision. Some new traders will want to jump all in and handle buying and selling on their own. Others may prefer to work with a broker who will help them make the right decisions for which stocks to purchase and how long to hold before selling. Those who do want to try buying and selling on their own will often benefit from using a trading platform like the one over at TradeZero so they can have access to the information they need to get started.

Open an Investment Account

An investment account is often a good way to get started. This money is set aside just for investments, so it’s not mixed in with the same money used to pay bills, pay for dinner, or anything else. Most investment accounts can be started with a small amount of money, so it’s not necessary to have thousands of dollars ready to invest from the beginning. Traders should compare their options before opening an investment account to choose the right one for them.

Set a Budget for Investing

As mentioned, it’s possible to start investing even without a ton of money to put into stocks from the beginning. No matter how much a trader has available to use for investing, it is still crucial to set a budget. The budget should include not only the total amount invested but what the money is going towards. For instance, it’s a good idea to limit individual stocks to no more than 10% of the investment portfolio to minimize potential losses. It’s also important to stick with the budget, so the trader doesn’t end up using money that was earmarked for something else to invest.

Setup a Practice Account

A practice account is a great way to get started without all of the pressure. Many online stock brokers will let customers try out the software with a practice account before getting started with a real account. New traders can try out the software, learn what everything does and how stocks work, all without spending – or losing – a penny. Once the new trader is familiar with the platform, has a better understanding of how stocks work, and is ready to put real money into stocks, they can close the practice account and open a real one.

If you’ve been thinking about getting into stocks, go ahead and start today. There’s no better time than right now to get started, and there is the potential for you to help your investments grow so you can start saving for the future. Use the tips here, however, to get started the right way and avoid huge losses from the beginning. By following the right steps and getting in a little bit of practice, you’ll be ready to start trading stocks like a pro in no time.


Interesting related article: “What is a Trader?