How To Learn Stocks And Shares – Understanding the Basics of Trading the Markets
How To Learn Stocks And Shares
If you’ve ever wanted to learn about shares and how the stock market works, you’ve probably been overwhelmed with information. There is a load of information out there and it can be very confusing, especially if you are just starting to learn the markets. Trying to find a starting point can be very discouraging. So let’s have a look at a few basics to get you pointed in the right direction.
Do I need to trade every day?
The answer to this is no. A lot of people think that you have to spend a lot of time trading everyday but that’s not true at all. However, I do recommend that you’re not a passive investor. In other words, don’t buy a stock and hold on to it just for the sake of buying stock. To start off, look at making 3-6 good trades per year. I know that may surprise you but that’s all you need to do it you’re making smart trades. The other thing to remember here is to get out at the right time. Too many people are greedy and want to hold on to the stock longer in case it will go up higher. If it’s time to get out, then get out. It’s better to make a few percent profit then to be greedy and end up losing money. How To Learn Stocks And Shares
Do I have to be super educated to be successful?
This is a common misconception. A lot of people think you have to be great at math or have some finance degree but that’s just not true. If you want to learn about shares, all you need to do is learn a structured strategy, get good advice from a broker, and be smart. On the flip side to this, you do need to begin to educate yourself on the basics and grow from there. Only invest what you feel comfortable with to start off. You have to learn how to take emotion out of it so that you make strategic decisions and not emotional ones.
As a matter of fact, a lot of trading just comes down to common sense. Think about a company that sells snow skiing gear and you want to invest in their stock. When in the year do you think their stock might increase in value? Well, they are not selling much gear in the summer time which means their revenue is down and makes the company less attractive to invest in. However, their revenues will increase greatly during the winter time. So, all things being equal, it probably would be good to buy just before winter and sell towards the end of the winter. I know that may sound overly simplistic but investing can be as practical as that. How To Learn Stocks And Shares
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