How to trade stocks online
The first step in trading stocks online is to open an
account with a stock broker account. There are many quality discount online
stock brokers out there that you can use. Scottrade and Thinkorswim are two
pretty good online brokers.
After you open an brokerage account, then you are ready to
trade. However, keep in mind that brokers charge a transaction fee whenever you
buy and sell a stock. The transaction fee for Scottrade is $7. So that means
you need to have at least $1,000 to start trading or the transaction fee will
eat you up. Let’s do the math, if you invest $1,000 and your stock rise 10% so
now you have $1,100 in your account. The $100 bucks you gain doesn’t include
the transaction fee yet, so if you minus the $14 transaction fee, you end up
with a gain of only $86. Now imagine, if your stock lost 10% and you are now
down to $900 in your account. You still have to pay transaction fee of $14 so
you end up with $886, so you lost $114 in your account.
Also, you need to be aware that there are slipperage fees
when you buy and sell stocks. With that being said, retail traders have a
disadvantage and you must be ready to invest at least $2,000 in order to see
substantial gains.
After you open a trading account, you should start paper
trading and make sure you know what you are doing or else you will burn money
really fast in real trading. To gain an edge in the stock market, you should
study how the stock market works. I recommend you pick up a few books on
technical analysis. Technical analysis helps you predict the stock price in the
short term which allows you to take profit of short term stock movement. You
can start with my free stock market ebook call the “Stock Market Winners”.
For stock market beginners, I recommend you to follow a few
stock market blogs and participate in forums and see how other people trade.
However, never take other people’s advice as buying or selling signals. You
should always do your own research and make your own judgment when it comes to
trading. You must devote time into study and constantly learning new things
about the stock market and take notes on what works and what’s not working for
you.
Remember, there are speculators who go broke and get knock
out all the time in the stock market. The main reason is they treat stock
trading the same way as gambling. They are not discipline and therefore they
are not trained to be successfully in stock trading.
Cick here to learn more about stock trading online.
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