The stock market can be a scary place for any beginner as it can become quickly overwhelming. As a beginner, you should always make sure you are well aware of the risks of gambling your money away, so we have put together a short starter guide for what should be your first steps before stepping into the stock market.
Invest in yourself to learn the basics
One just doesn’t waltz in and starts gambling their money without understanding the basic knowledge and terminology. For example, you don’t bet on a football game without knowing the odds, line-ups and even some background information – the stock market is the exact same thing. Understanding the trends of different industries and the current news can take a while to grasp – if you want to make money, you need to learn this first. Don’t forget to read books, watch videos and read journals!
We recommend you set up an account on our BullBear App which is free to use and you can test your knowledge using virtual currency and play against other people.
Mapping your goals and how to achieve them
Like any other things, don’t walk into something headon but rather, map out your ideas and how you would want to achieve them. Financial success comes from planning, like writing an essay, knowing which companies and/or industries you’ll like to invest and map out how much you want to spend, when you want to purchase stock, revising and researching trends.
Start with some paper, pens and draw yourself a circle. From there, web out with some ideas you would like to do, which industry/company you’ll like to invest in and even some tips and terminology to help you along the way.
Decide how you want to invest
There are a multitude of apps out there that you could use – both on the app and google play store. Here, you are able to create an account and deposit any amount of your money to start your portfolio. We recommend going with eToro or easyMarket. Now that you know some different accounts, its time to think about your trading style in which we’ll include four:
1- Scapling: This strategy aims to repeatedly capture small profits. This means holding shares for a very short period of time and sell as soon as a profit arise. Note that not many apps allow this time of trading
2- Position Trading: This strategy involes trading to profit from dominant trends. A trend is when the share prices moves in one direction for a extended period of time.
3- Day Trading: This strategy involves trading your shares in a single day from opening and closing positions. Selling a trade before the market closes also reduces unfavourable news overnight.
4- Swing Trading: This strategy involves focusing on larger price movements, rather than start and end trends. These shares are usually held between a few days to a week.
Don’t set unrealistic targets
One of the biggest mistakes people make when first starting trading is setting themselves unrealistic targets. The one thing we absolutely cannot 100% predict is trends. Something terrible can happen overnight and the prices of your shares can plummet, leaving you with less money than when you started of with, or vice versa. This can be very offputting, but you need to remember that trading is all about risk taking – everyone fails but its the successful ones you need to land.
We recommend you download our free to use BullBear App where you can practice trading shares with virtual money and play against other users to test your knowledge to win Bulls, a virtual trading currency you can use to win vouchers. Also join our FaceBook Group.