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How To Trade And Invest In Stocks
What is stock trading and how do you buy and invest in the stock market? 

These are essential steps you should begin with when you are a beginner (you can see this as a stock market for dummies guide). 

Investing and trading is all about growing your money, which should be in everybody’s interest.

Now, let’s look at what each market is and some simple steps you can take to get started with stock trading.
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Stock trading often occurs on an exchange, which is a venue for buyers and sellers to transact a particular stock at an agreed price.

A stock exchange can either be in a physical or virtual location. A physical stock exchange has a trading floor where stock trading occurs.

There is a lot of waving, signaling and yelling to each trader on the floor. A virtual stock exchange is a computer network where stock trading occurs electronically.

The stock market facilitates the security transactions between buyers and sellers. It reduces investing risks because each stock trader does not need to search around the neighborhood for a particular stock he can buy.

A stock market links both parties to transact a certain stock. 

A primary stock market is a venue where an initial public offering (IPO) offers the stock for the first time. A secondary stock market is a venue where investors can buy or sell stocks freely after the IPO.
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You need to understand fundamental and technical analysis, the first is a technique that you can use to analyze the company’s financial performance. By checking the public statements and financial reports of a business, you can easily make trading decisions. 

You need to understand financial reports like income statements and balance sheets. You also need to follow news reports about the company and the general economy as well. You can easily find information online.

You also need to understand technical analysis, which is a process of recognizing patterns in order to predict the future movement of a stock price. 

You can use the information to make either buying or selling decisions.

A wise trader will use fundamental analysis in identifying a possible stock investment and technical analysis in deciding the timing of stock purchase.

You also need to make a thorough research on the company. You have to learn about its management and competition. This way, you can easily evaluate if the company is stable or not. You will know if your investment will generate money over the long term.
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You must find a good broker to help you become successful in stock trading. You can interview online brokers so that you do not have to rely on unverified tips. You can ask about pricing details and other profitable investment alternatives.

You have to make sure that the brokerage firm provides good customer service and educational resources for your research. Lastly, you have to learn about the security features of the online trading platform.

If you are a new trader, you must learn about brokerage tools that you can use in trading stocks. Since you are still new to the investment, you may require more services from your broker. You may seek personal trading advice. 

However, you have to pay a higher fee for additional services. The fee is worth it because you need to learn about stock trading. Some brokerage firms also offer tools and advice free of charge. However, you can expect that such help is not as extensive as a paid advice.

Once you have acquired trading experience, you can shift to a discount service, which is a broker service that does not offer advice. You can make your own research and trading decision. 

Actually, even if you are still a new trader, if you have the aptitude to learn by yourself, you can avail of the services of a discount broker, which is cheaper than the other types of brokers.
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Before you can trade stocks in real time, you can avail of an online stock simulator, which most stock brokers offer. You can practice your trading strategies and learn more about stocks without losing real money.

In trading stocks, you need to determine how much money you want to invest. You can start with a low amount then build up your capital as you gain more experience in trading. 

One rule in stock trading: Invest only what you can afford to lose. You can reinvest your profits so that your portfolio will grow significantly over time.

You must also learn to diversify your investments because stock trading is not always a reliable source of income. It is possible to earn money today yet lose more money the following day. Thus, by learning to diversify the portfolio, you can spread out your risk among the various types of investment products. Furthermore, you need to learn to invest in various industries so that again in one industry can offset the loss in another.

Trading stocks is like a job. You need to allow time for research and reading. You must update yourself with the latest financial news. If you do not have time for research, you can invest your money in exchange-traded funds instead.

A good stock trader has a trading plan. It is important to have solid trading strategies and make an effort to make good decisions. You should know how to time your buying decisions and keep a limit on the amount of your exposure. You know how to use the various trading strategies at the right time.

You also have to know when to buy a stock. You should use technical analysis to check if there is an ensuing pattern in the price movement. You should try to buy a stock at its lowest price. Because you have a trading plan, you do not need to sell the stock at the first sign of a price plunge. 

You have to trust your judgment based on the research that you have conducted. Invest in financially sound businesses and keep in mind that the stocks prices will eventually go up over time. 

It's not good to sell a stock when the price is on a down turn because you will just lose more unrealized profits when the stock recovers.
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Johan Nordstrom Professional Trader Risk Management
I'm a family guy in my late 20's who learned how to trade the markets in a simple yet effective way. During university I studied investing and graduated with a master's degree in risk management. Quickly, I realized that I was onto something. I started helping friends and taking students. My students started getting results, spent less time in front of their screens, and their accounts grew consistently. Learn more about me here.
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