Sunday, September 9, 2012

Stock Trading Education

Thanks to low interest rates, the "idea" of stock trading has become more popular by the day. Why settle for a lowly 1% return when you could easily get 5-10% trading stocks?
I emphasize "idea" because, while a lot of people have thought about entering the market, only a few seem to take action. Be it the fear of losing money or the unknown, people just cannot seem to muster up the courage to jump into the markets.
There are really only 4 steps to start trading stocks:
  1. First, you must sign up for an online stock brokerage.
  2. Second, you must fund your account.
  3. Third, research potential stocks to trade.
  4. Finally, make a stock trade and hope for the best.

Before you start making trades you must have a trading strategy:
  • How much are you looking to make?
  • What is your time frame?
  • How much money do you have to play with?
  • Do you have expertise on a sector (i.e. Health, Energy, Materials).

There are a couple things to keep in mind when researching for stocks:
  • Does this stock have enough room to move within your time frame?
  • Does it have enough volatility or growth to meet the returns you want?
  • Is there any potential looming bad news that could cripple this stock?
  • What should ultimately drive the stock price higher?

1 comment:

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