For seasoned day traders, trading stocks online may seem second nature, but for others, buying and selling stocks online is like venturing into parts unknown. The widespread emergence of online trading, brokerages, and dynamic stock trading software tools tremendously simplifies the online stock trading process, but this has also led to certain complexities and liabilities for professional or recreational home investors. Here are some basic steps that will help every novice successfully trade stocks online.
Select an Online Brokerage
Before anyone can trade stocks online, they must select an online brokerage. These days, there are many online brokerages vying for the business of potential customers. Thus, it is important for every trader to find the right brokerage that will be a perfect fit for their investment needs. One way of going about this is to choose an online firm that offers a lucrative beginner package. Certain online brokerages provide novice traders with the ability to place free trades for 30 to 60 days, allowing them to get a feel for the online trading process and save money at the same time. However, those in search of the best brokerage accounts should consider much more than the ability to place free trades. They should also take into consideration the number of quality services that the online brokerage provides.
Review the Rules
Unfortunately, a trader cannot withdraw gains from their stock trades and stuff them under their mattress for a rainy day. There are rules and regulations in place that dictate what they are allowed to do with their stock trading profits, whether online or through traditional paper investments. Not being aware of these rules can cause certain problems down the road, so novice traders should learn the ins and outs from professionals and become informed on the do’s and don’ts of online stock trading.
Learn How to Research and Trade Profitably
After selecting an online brokerage and learning the basic rules governing stock trading, traders should research and educate themselves on profitable online trading strategies. There are online options trading courses that will teach everything a trader needs to know about becoming a successful investor as well as help them become familiar with all of the software trading tools at their disposal. An options trading course will teach beginners all about stop orders, timed orders, limit orders, how the markets work, and much more, allowing them to begin trading confidently right from the start.
The U.S. and global stock exchanges are home to thousands of stocks that can be traded each and every day. Novice traders should follow successful traders and begin researching all of the potential stock plays. However, in order to become a knowledgeable and smart investor, traders should begin developing their own opinions by performing organic research and only acting on moves that make sense to them. An online brokerage should provide a stock trader with real-time financial data, charts, and other tools to help them make informed trading decisions. When combined with fundamental and technical analysis provided by other trusted sources, this information can be vital to a trader's online trading success.
Learn the Trading Software
When a sum of money is deposited into an online brokerage, a trader will be granted access to an online trading account with a diverse set of software features that will help them tremendously in researching stocks, executing buy or sell trades, and tracking each trade. Novice traders should take their time and learn how to use these software tools before placing any large trades. Also, an online brokerage should have quality customer support that can clear up any confusion and answer any questions a trader may initially have.
Placing Initial Trades
To make a successful entrance into the world of online stock trading, traders should make a couple of smaller trades and observe what takes place afterwards. Before long, they will notice the correlation between the sell and buy transactions while gaining live trading experience.
About the Author:
Keith Ng has been an online trader for two years and now shares his tips and strategies for forex, stock or options trading with the public. He was also a part of one of the most successful stock trading courses in Singapore.