Now that you know how to open a Share Trading Account , let’s find out how to trade on the stock market. The easiest way to do share trading is to hire a stock broker or brokerage firm.
There are a number of well known Stock Brokers who can place trades for you and give you advice from time to time. But if you want to do it yourself, then just follow These 7 Tips To Trade On The Stock Market:
1. Read Books or Articles
Read books or articles on stock trading as much as possible. Books are provide a wealth of information and are inexpensive compared to the other modes of education such as broker classes, seminars, or educational DVDs. You can also subscribe to Business News Channels and news portals for articles related to stock market and companies.
2. Monitor Market Movement
By monitoring the movement of markets each day through TV and print media, investors can expose themselves to trends, expert analysis, company merger, acquisition etc. Observing the effect of news on particular stock price and reading fundamental data can also serve as another good source of exposure for investors.
3. Get Paid Subscriptions
There are many firms and brokers who provide information on when to buy or sell the stocks based on the market research and analysis. In turn, the firm will charge you a commission, normally several cents per share. But do not rely 100 per cent on these firms. Use your own insight and research to choose the stocks.
4. Invest In Business You Understand
Never invest in a stock. Invest in a business instead. And invest in a business you understand. In other words, before investing in any company, you should know what business the company is in.
5. Choose The Stocks
Always follow the market trend for few days and then select stocks you want to purchase. Once you prepare your portfolio of stocks, try virtual trading for practicing or you can start with small investment, for example 1, 10, or 20 shares. And to buy the stock, place your bid through your share trading account. The sellers of that stock will ask for a specific price. When these two prices match, the sale will be executed.
6. Stop Loss
A stop loss is important to limit your loss on a security position. And Once you buy the stock, you place a sell order so that when the stock price reaches a certain level, the sell will be executed. And stop-loss order can be helpful while you are on vacation or cannot watch your position.
7. Take Informed Decision
Proper research should always be undertaken before Investing in Stocks. But that is rarely done and Investors generally go by the name of a company or the industry and they belong to. This is, however, not the right way of putting one’s money into the stock market.