New investors in stock trading should have access to multiple sources of quality education. A method of trial and error, together with the ability to continue will eventually lead to success. One great advantage of stock trading is its lifetime existence which means that investors have years to develop and hone their skills and the strategies remain the same and as relevant as they were twenty years ago.
How to start?
1. Open a stock broker account
Find a good online stock broker and open an account. Become familiar with the site’s overall layout and the use of free trading tools and research offered to clients only. Some brokers offer virtual trading which you can use to get going.
2. Read a lot
Books are the storehouse of information and are lot cheaper than classes, seminars, and educational DVDs sold across the web. You can find the top stock trading books for investors.
3. Read articles, blogs and other resources
Articles are a great way to enhance knowledge. Begin with the basic ones and proceed towards the advanced ones in stepwise process. Search through Google for resources like investopedia.com.
4. Take the assistance of a mentor
A mentor could be anyone – a family member, friend, colleague, neighbour or anyone with a fundamental understanding of the stock market. A good mentor encourages others to answer questions, provide help, inform about various resources, and keep spirits up in times of difficult market conditions. All successful investors have their mentors during their early days.
5. Study the masters
Have knowledge about great investors from the past to develop a clear perspective, inspiration, and appreciation for the stock market.
6. Follow the market
News sites such as Yahoo Finance and Google Finance are great resources for new entrants into the stock market. Investors can have exposure to the market and follow the trends, third party analysis for making informed decisions. Pulling quotes and observing fundamental data are also good ideas for gaining an insight into the stock market.
7. Paid subscriptions are a good option
Paying for research and analysis can be both educational and useful. But caution is recommended as there are scams offering paid subscriptions for guaranteed success.
8. Attend seminars
Seminars are a useful way to have an insight into the overall market and specific investment types. Some seminars are provided free which can be a beneficial experience, but avoid the sales trap.
9. Buy or practice trading your first stock through a simulator
As your account is created, the best way to get started it to simply take the plunge for your first trade. Don’t be afraid for a small beginning and as less as 1, 10, or 20 shares will serve its purpose of getting you in the game. Avoid the temptation of doing it big. This is one of the most common mistakes traders make and suffer big losses in the beginning. Be clear about portfolio allocation.
10. Passive Index
For the vast majority, trading will be tough. Warren Buffett, the greatest investor of all-time, recommends individual investors simply passive index instead of trying to beat the market trading on their own.