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.