Any type of investment requires some good analytical knowledge and at least some basic skills. A lot of people try their luck in investments every year, but almost all of them quit leaving some money on the market. There is only one problem here: the lack of education.
It is possible to earn some good money on shares if you know what you’re doing. If you are looking forward to learn shares trading, you are in the right place. We’ll discuss the main aspects of this topic.
At first, as an investor and trader, you should understand what is the stock market. Stocks themselves are parts of companies. They are also called equities and basically they represent your membership in the company. These “memberships” are bought or sold on stock markets. The price and share vary in a big radius.
One might ask, “why would an owner of a company sell its shares?”. The answer is simple: it’s a good way to earn some capital. Imagine a that issues 1 million shares for $10 per each. This way, when all “memberships” are sold, the company gets $10 million of capital that can be used to develop and grow its business.
There are two ways of earning money by having a share. In the first variant, it is possible to earn some percent from the companies profit. This doesn’t work with all stocks, but such a thing exists.
The second way also is simple. You buy a stock, wait for the price to rise, and sell it. Here works the rule “buy cheap, sell expensive”. As any other type of investment, there also are risks. After your purchase the price can both drop or raise. A lot of time can pass until there is some change in it.
Everybody knows Google, Facebook, Twitter, Amazon, right? But do you know the prices per share? This can motivate you to learn shares trading with bigger interest. Here you go:
If you check this information on the internet, you will have a possibility to see the price changes for a selected period. For example, at the moment when this article was being written, Twitter had lost 1.09% of the price per share. It’s a good possibility to buy it and wait for it to grow.
On one hand, anything can be learned without additional help. By having access to the internet, you have all the news, needed information, and educational materials in one place. Some materials for educating yourself are only available for money, so you should keep in mind that for the best knowledge you’ll have to invest some money into yourself. Forums can be considered as a good possibility to learn by discussing stuff with other people and asking questions, but there is no guarantee that all you read there is correct.
On the other hand, by learning without a mentor you can miss important details or easily fall for fake information. It’s good to have someone who can be trusted to help you in this world of investment.
As a newcomer that wants to learn shares trading, you should be well prepared before doing anything. You need to analyze the market and learn about the way prices change. Additionally you need to understand how various aspects influence the company where you own a stock. Let us start from the beginning.
The easiest way to have the best understanding about stock trading is by reading books and articles on the topic. This is cheaper than visiting seminars, buying an educational course or visiting specific classes. The only drawback might be the fact that the only thing that would push you forward would be your own interest and motivation.
Not all books are good enough if you want to achieve success. Here is a list of 5 best books about investments:
Consider buying one of these books as an investment into yourself. It only depends on you for this to buy off.
A good way to learn is to read other peoples discussions and take part in them, yourself. It’s hard to tell which forum is the best, but you could try out r/StockMarket on Reddit. There you can ask any question about this topic. Both amateur and professional traders often spend their time there helping each other and discussing news about different companies and stuff.
EliteTrader or Trade2Win also are decent variants. On any forum you should be careful about whom do you listen to. There can be trolls around that can give false recommendations. Check all the facts on your own too!
As an investor, you should be interested in all the news that might have an impact on the share you bought or plan to buy. Even the slightest things can give a company's stocks a jump or fall.
Beginners can use such sites as Yahoo Finance, Google Finance. Additionally you can read the Wall Street Journal and Bloomberg. Daily monitoring the markets and reading news is important for you to understand the situation around. Without noticing, with time you will learn to analyze the consequences of various events and predict what might happen next.
Also a good choice might be watching TV. For example, one of the most popular channels about the investment market is CNBC. If you turn it on at least for a couple of minutes, it will have a good effect on your investments knowledge. With time you will see that most shows have no value and give worthless recommendations - that’s when you’ll find really good shows.
Having a mentor isn’t necessary, but it’s a good possibility for someone more experienced to help, guide you, and give some advice. This can be any person that understands the market and is or was a trader.
A mentor can be a friend, relative, or a person from the internet with whom you can discuss anything on the topic. Just make sure the person really knows what’s it talking about and has some results on it’s own.
Before attempting to earn some money, it is highly recommended to use a simulator. Investing is full of risks, so it would be better to test your skills before going into the open. Try to have a few successful trades. When you see that everything is good, move on to creating a brokerage account.
We can offer three most popular stock trading simulators. These are:
When you see that your exchanges bring you some virtual money, then you are ready for the next step.
For the beginning you should find an online stock broker that can be trusted. Maxitrade is the one you need, as there are a lot of positive reviews, the commissions and fees are low, the minimum deposit is affordable and there are a lot of useful instruments for trading. Additionally there are regular promotions of all types.
Not all brokers offer all required tools in one place. With Maxitrade you don’t have to worry about that. Here you can have a personal assistant and analyst, information about events, the most important news on the economical market and other stuff.
If you don’t know what’s a brokerage account, here’s a brief explanation. This is a type of taxable investment account that can be opened with the help of stock brokerage firms. And that is the place you buy or sell stocks.
Usually, brokerage firms take a percent for every operation the user does. Maxitrade offers the lowest fees possible for the user to feel comfortable when trading.
So, let us sum up:
What are you waiting for? Millions of traders are earning money now!
There are four types of fees that need to be paid when trading shares. It’s better to get acquainted with them before your first deal so that it would be possible to calculate what part will you have to pay. Remember that every broker sets its own fees. Let’s have a look at all of them.
At first, we have a “flat fee”. This means that the broker you work with charges a single rate without any difference of which or how many shares were purchased. This system is the most common.
Then we have fees “per share”. This means that the price is different for every share traded. This system is usually used by active trading brokers.
Next goes the “broker assisted trade fee”. This works when a client has no access to the internet or wants to trade a specialty security. To execute the order a broker assisted trade is placed. This is done by a licensed broker live.
Finally, we have the “mutual fund trade fee”. Such trades can be placed both via phone or online. This depends on the broker that is used. The charged commision can be different depending on the type of fund that is being traded. Some brokers do not charge any transaction fees, but can make you pay an early redemption fee if the fund is sold too quickly.
There are a lot of seminars for different topics. Usually, the prices per ticket are really high and the organizers promise to give you knowledge that will help you earn millions. You should be really careful for what you pay, because most seminars are simply created to earn money on beginners.
The false promises can be covered by enormous sales funnels and excitement during the course. But when you take a closer look, you can see that the strategies that are offered aren’t profitable at all. Also the information given there can appear to be available on the internet for free.
This doesn’t refer to all seminars or courses. There are really good events that give valuable information, but it is hard to find them. For example, it is possible to recommend Coursera, because there you won’t get any trash knowledge.
The main rule of investment is to never put all your money into one project. Of course, the price for the share you’ve bought can raise, but at the same time it can drop even more. This is the mistake a lot of newcomers do when they come to the stock market for the first time.
It’s always better to earn a bit less than to lose everything. That’s what you should understand from the first moments of learning about stocks. Sometimes it’s not a bad idea at all, because the economy always can thrive or fall. The basic economic cycle includes financial progress and regress, so maybe if the price for you share has fallen hard, it could grow even higher after that. It all depends on the events around.
If you still aren’t sure if this type of business is for you, try starting with something small or use a simulator. You can also play trading games on the internet that are created for people to practice their skills without real losses.
It isn’t important to know every aspect on the market if this is a hobby for you. You can simply buy one or two shares and keep them long enough until you get some profit. Even the basic skills will help you understand, whether there is sense in investing into your company or not.
Register on Maxitrade now to learn shares trading online. Choose any affordable offer, analyze the available information about it, get acquainted with the thoughts of professional traders (if they are available) and buy your share. And when the price rises, sell it and get your profit with minimum fees.