So you have heard about the stock market and you are wondering how to start trading stocks. Before you jump into the world of stock market trading, you need to equip yourself with the necessary education and equipment. The stock market is one of the most difficult places to make easy money. Do not think that it is easy. But if you persevere and increase your trading knowledge, you will be able to have another source of income that will supplement the income from your current job.
First and foremost, you need to realize that trading is not an easy thing to master. It takes some time to be good at it before you can start making money. Just like learning to play the guitar, it will take you some time before you will be able to generate a consistent income.
Trading is about knowledge and skills. Without the necessary knowledge and education, it is difficult to succeed in the stock market. You need to have a knowledge of stock charts, trends, support and resistance, candlesticks just to name a few. The best thing for you to do is to enroll yourself in a stock market course.
On this website, you will find a comprehensive stock market course that is free and takes you step by step from basic to the more advanced knowledge. Once you complete the course, you will have enough knowledge to navigate the stock market.
Trading books and books on technical analysis are some of the best and cheapest way to increase your knowledge of stock market trading. Before signing up for an expensive course, spend a few hundred bucks buying some of the best books on trading. Here is a list of books that I recommend for the beginner:
These first 3 are very good books that you need for trading and investing knowledge. Read them from cover to cover and you would have unlock the many secrets of the stock market. The last one is an interview with very successful traders and investors and that will help you to know how top traders think.
The next thing you need to do is to get a reliable stock broker with good commissions. When you trade stocks, you will need to do it through a broker. An online broker is the best because the commissions are cheaper. Brokerage fees can range from $1 to $9.99 or even higher depending on which broker you use.
I recommend that you use Interactive Brokers. Interactive Brokers is a listed company and they provide the cheapest commissions out there. Their service are also quite good.
The next thing you need to have is a trading strategy. A trading strategy is a set of rules to enter and exit stocks. A good example is to buy stocks when it is oversold and sell them once they are overbought. There are tons of trading strategies out there and its good to learn a few trading strategies. Ultimately you should choose a trading strategy that fits your personality.
Below are 2 trading strategies you can learn about:
Once you have discovered a new trading strategy, it is time to put the trading strategy to the test. The best way to find out if the trading strategy works or not is to practice it with paper trading. Many brokers and websites provide practice accounts that allow you to test your trading strategy.
Interactive Brokers offer a free practice account when you sign up with them.
Once you have achieve some success with your virtual trades, then its time to put real money on the line. Start with a small amount. You can start by risking $25 per trade and slowly increase the size as you achieve more success. This will help to keep your losses small and give you a real taste of how it feels to trade with real money.
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