The stock market recently ended its longest bull run of all time, one that lasted almost 11 years. It’s since fallen into a bear market. Still, whether you want to try and grab bargains as stocks go down, or bet on stock prices going lower, the stock market offers intriguing possibilities. Read on as we take you through the process of starting a stock trading career.
Knowledge is key
Like any new adventure, it’s best to understand the terrain before embarking. Make sure you seek detailed knowledge about how trading stocks works. Acquainting yourself with the stock market is a natural first step anyone should take before parting with their money. We highly recommend you spend some time reading all of the stock market guides on Invezz.
Note that the stock market can be risky, and you can lose your capital if you guess wrong. Still, you should be ready to start the trading journey after conducting the necessary safety checks.
Open a brokerage account
Brokerage firms link traders to the stock market. You need to open an account with a preferred broker to access the market. However, you should do due diligence before choosing a broker. Some aspects to look out for while selecting the broker are costs and the convenience of the trading platform. It will be advantageous if the trading platform offers demo accounts where you can practice trading without venturing real money.
If you need help choosing a stock broker, you can read our list of the best online stockbrokers. We also provide another guide which gives you more information on the different types of stockbrokers.
Decide how you want to approach the stock market
First, you should evaluate yourself to find out how much time you can allocate to following the market and managing your portfolio. If you want to pick stocks for yourself then you need to have the free time to analyse and monitor your portfolio. This is certainly the preferred route for the typical new-age investor, and can provide lucrative results if done right. Just remember, you need to invest both time and money to make it work.
What if you don’t have much free time? Alternatively, you could opt to have someone else do the stock-picking for you. Luckily, the Internet has plenty of algorithm-powered robo advisors that offer services at an affordable cost. A great majority of brokerage firms offer robo advisors to help traders manage the investment process without turning in unnecessary losses. We explain more about those types of advisors in this guide.
Starting to invest
Once an account is ready and you have done some rounds with the demo account, it is time to go live! At this point, it is critical to learn to minimize risk by diversifying your portfolio. In addition, it is helpful to learn new investing strategies and approaches to maximize the return from the stocks you buy.
The stock market is a huge community of investors with tons of new information that needs devouring. Therefore, keep updated with investing news and follow the market closely to identify trends and capitalize on them.