Many people still think of the stock market as some strange and complex world where only those who are experts or are stupid enough to risk their money would dare to go. However, with the introduction of online stock brokers, anyone can invest in the stock market and manage their portfolio from the comfort of their own home. If you are a beginner trader, investing through an online brokerage firm is the easiest option for you, as they offer comprehensive tools and strategies, as well as discount brokerage fees, and some even offer a certain amount of free trades when you sign up. The second thing you should know if you are a beginner trader, or looking to get into trading on the stock market, is choosing a safe and secure investment (in most cases this will be a penny stock listing).
The first step to online trading is finding a suitable trading broker. There are many safe and reliable discount brokers that offer free accounts and relatively low brokerage fees. Many of these brokers also offer online stock trading courses and strategies, which will greatly aid you if you are a beginner. The most important thing however, is that you feel comfortable using their tools and navigating the site. Below is a list of some of the top online discount brokers. Not only are they safe and trusted, but they also offer the latest stock market news and trading strategies.
A vital part of trading on the stock market is having the right information. As a stock can have monumental gains or dismal losses in a matter of minutes, the latest information gives you a huge advantage. Your online broker will provide you with updates on your stocks, company announcements, and any other information needed to make a decision of whether to buy or sell stock.
It is also important that you do some of your own research before making a decision on what action to take with your stock. Browsing through stock market news sites, stock listing reports, daily streaming stock quotes and data charts, as well as the official website of the financial market you are dealing in. A website that I find to be invaluable is BigCharts.com. They provide real time stock quotes as well as detailed, customizable charts, letting you choose to chart anything from moving averages, to your stock against various indexes, and even check stock prices as far back as 1974. Even better, you can get information on any stock or major index in any of the major financial markets across the world. Before making any decision dealing with your stock, I suggest you do some research on BigCharts as they will provide you with a plethora of information.
As a beginner, you probably don’t want to risk any large sum of money when you have had little or no experience trading on the stock exchange. But how can you gain experience without risking your money? The answer is simple: penny stocks. Penny stocks are defined as any stock valued at under $5. The main advantage of a penny stock option is that there is little risk as the price is relatively low. Additionally, penny stocks have the potential for larger gains than higher priced stocks. Because penny stocks are relatively inexpensive, you can purchase a larger quantity for a lower price. For example, for $250 you can buy 1000 25 cent shares or 10 $25 shares. A gain of 2 cents on your 25 cent shares will yield a portfolio value of $270; you make $20. However, the same 2 cent gain on the $25 share will only yield a portfolio value of $250.20; you make a dismal 20 cents. By trading in the low risk environment of penny stocks, you can come to a greater understanding of how the market works, choosing the stocks that will provide the greatest return on your investment, as well as developing your own strategies and systems.
Hopefully, you have found this information helpful and informative. Please remember that I have only outlined two necessities before trading on the stock market, and that you should have some knowledge of how the stock exchange works before even considering trading on it. And like any financial market, there are risks involved when trading on the stick exchange. In the future, I will outline how these risks can be minimized and managed in order to maximize your profits with minimal risk to your investment.