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Even though all those success stories make it seem like it is easy to become rich with trading, the first step into this investment form is always the hardest. If you are interested in trading stocks, but you are not sure how to start – this article is for you!
Why should you start trading stocks?
If it’s money for your retirement or just for some extra cash – investing in stocks seems like the best way to maximize your capital. We have to classify two different types of trading. On one hand, we have the long-term investment, which is usually for retirement and promises a higher return, than the common bank accounts have to offer. On the other hand, we have the day trade. This option is based on the idea to buy stocks when they are low (cheaper) and sell them when they are higher (more expensive).
The difference is the money that you make. Day trading is a full-time job because you have to analyze the market and figure out which time is the best to buy and sell. This principle sounds easy, but in reality, can be hard to predict. Whatever type of trading you’re interested in, it doesn’t matter when you start out because the first 5 steps are the same.
Start trading stocks in 5 easy steps:
If you start out with trading stocks, these 5 steps will help you to make your first investment. It is as simple as that. After these 5 steps, you can decide for yourself if you are interested in long-term trades or if you want to become a day trader.
Step 1: Find the right brokerage.
Finding the right brokerage is an essential step because it should be a trustworthy platform and have low fees. Not only is a brokerage needed to buy your first stocks, but also to keep track and sell them. We highly recommend that you do your research before deciding on one brokerage. The trusted Binary.com review, for example, will show you all the necessary details to determine which brokerage you want to go for.
Step 2: How much money do you want to invest?
Think about how much money you are willing to invest. If you decide on long-term trades, we recommend investing a certain percentage of your income each month so that with time your investments are growing. Otherwise, it is good to start with a small amount to get the hang of investing.
Step 3: Analyze the market.
Get familiar with the markets, the business, and the possible stocks that you could invest in. This is by far the most time-consuming part of investing in stocks, especially if you want to buy low. Not just that, even professional traders have issues determining when it is the best time to buy certain stocks. We recommend not to stress about it too much but rather keep tracking them over a more extended period.
Step 4: Decide on what you want to invest in
Now it’s time to decide what you want to invest in. We recommend diverse stocks, don’t focus on just one field, like tech. The more variety you have in your stocks, the better! If you are still unsure what the right stocks are for you, you still have the option to get inspiration from successful traders.
Step 5: Start trading.
Now it is time to start trading! You have the perfect brokerage for you, decided how much money you want to invest, got familiar with the market, and decided which stocks you wish to trade!
