When you’re a new stock trader, things can get exciting quickly, but it can also get rough in an instant. That good part is that you may learn and earn a lot throughout the course of your trading career. The fearful part is that this industry can be treacherous and can cost you the money you don’t even have.
In this article, we lay down some of the most important advice when starting to make trading a part of your career. Make sure you read all the items and keep them in mind if you want to make serious money out of the stock market.
Familiarize yourself with the trading platform
Whichever your broker is, you should learn by yourself how to enter and exit a trade. When you’re not quite familiar with the platform, there are a lot of things that can happen—wrong things. And such mistakes can easily cost you a huge portion of your capital.
You may end up placing a trade to sell something you don’t even have, or maybe buy a stock when what you wanted to do was buy the option.
It is very important that you know how to navigate and use the platform properly when especially when buying and selling stocks, options, or other securities you are planning to trade.
In order to get familiarized with the platform, you can place practice trades. Most brokers have virtual trading platforms or demo accounts. That means there’s a simulated environment that permits you to place trades as if you were in the live market. You won’t have to risk any of your money.
And even if the money you’re betting and the environment are not quite real but rather a simulation, the process will still give you the practice and the familiarization you need for when it’s time to place and execute real trades.
Finding Stocks to Trade
One of the most usual mistakes for new traders is chasing one stock like a mad dog. Most pro traders, on the other hand, first try to learn everything they can about a bunch of stocks. They get to know them really well at first and then they trade those stocks at the best possible time.
No matter which method you use to find your stocks as a beginner, you should come up with 30 different stocks, preferably diverse, and stick to them until you can comfortably move on.
After you have familiarized yourself with the platform and you have already chosen your stocks, you can start practicing your way to becoming a successful trader. Use a demo or practice trading account. You can start placing virtual trades as if you had the money and follow the trade through.
And following the trade through the end means that you will write down the details of trade, such as at what level you sold the stock and why you chose that level. This is one of the most crucial part that newbie traders mistakenly skip.