Advertising
Advertising

How to Start Trading Stocks And Be Successful

How to Start Trading Stocks And Be Successful

If you want to start trading stocks, reading this post will help you not to make some mistakes that are very common. And once those mistakes are made, your portfolio is at risk.

As the economy is going down, a stock trader’s life is getting harder. However, a great stock trader will always find a way to make money through stock trading. How could this be even possible? Like in everything else, knowledge is power. The more you know about the trading market, the easier it gets for you to make money from it.

Advertising

That’s why even when the economy is not doing so well, a great stock trader will always know what to do, and will also make sure that he’s, or she’s, making profits on his or her invested money. To become a successful stock trader, there are several factors that you’ll need to take into consideration. Until you do so, you could be putting yourself into a lot of trouble.

When you’re trading stocks, you’re investing your money into the companies. In fact, it means that you own a tiny portion of those companies in which you’ve invested your money. When those companies make profits, you do too, but when losses occur, you lose as well.

Advertising

However, your losses and the companies losses are somewhat different. When a company loses, that money is gone right away. But in your case as an investor, your money is not lost until you decide to sell your shares. It’ll always be up to you to know whether or not to sell. Some people will hold on and pray that the losing trend reverses and start gaining some of their losses back, while many others would just accept the loss and sell the rest of their shares. It’s a decision you’ll always have to make on your own if you ever get caught up in a situation like that.

How to start trading stocks 

To be able to start trading stocks, you’ll first have to open a brokerage account. It’s through this broker that you’ll be able to execute your transactions. Whether it’s to buy or to sell your shares, your broker will be the middle man. The requirements are not much; you’ll have to be at least 18 or 21 years of age depending on the state where you live, and you’ll also need to have a social security number which will be used as your ID number and for tax purposes.

Advertising

You may find it a little difficult to pick a broker because there are many of them. It’s extremely important that you pick the right one for your trading habit. All brokers are not created equal; they have their individual characteristics. When it comes to fee per transaction, it varies from broker to broker and those fees can significantly affect your portfolio.

Once you’ve been registered with your broker, you can then fund your account to be able to start trading. There are different paths through which you can send money to your brokerage account. The fastest routes are via electronic transfer and wire fund transfer. Electronic transfer is free of charge; it’s just like a bank-to-bank transfer that you can do on your own. However, a wire fund transfer will cost you a fee – some banks will charge you a fee of $25, but this fee varies depending on the bank. If you aren’t in a hurry, you can mail in your check or do a money order which won’t cost you any more than your mailing fee.

Advertising

What should you do next to make sure you’ll be making a profit?

If you don’t know anything about stock trading, the best thing to do is to sit down in front of your computer and start researching. Not conducting any research is one factor that’s causing so many traders to lose their hard earned money. You don’t want to be part of this group of people. For this reason, you’ve got to conduct your research before you buy any stock.

It’s not difficult at all if you know what to look for. But if you don’t know anything about the market, I’d suggest that you start by doing paper trading instead. Once you feel that you’re ready for the real thing, you can move on and start using real money. There are many websites out there providing free paper trading platforms; they’re very helpful if you’re looking to learn the tricks. Wall Street Survivor is the one I used to utilize; it’s very easy to navigate through. You can take a look at it to see if you like it, if not, you can always find many others on Google.

If you do so, you should be able to perform better than many stock traders out there who are trading on luck. You may need a little luck sometimes, but your education is the secret to becoming successful trading stocks. You may have heard of several individuals who become millionaires from the stock market. If you take your time to read their stories, you’ll see how much time they’ve spent on their education before they were able to attain such a goal.

Educate yourself, don’t rush to trade just because you want to. The more you know about the market, the better it is for you. One day, you will also be successful from stock trading.

More by this author

Take a Look at 4 of the Best Digital Cameras for Vlogging Some Key Differences Between IRA and 401(K) Accounts How to Start Saving for your Retirement and Have Peace of Mind How to ensure you’re buying the right pair of football gloves Here’s how Consumers Rank the Top 6 Fast Food Restaurants in the US

Trending in Money

1 The Best Ways to Save Money Even Impulsive Spenders Can Get Behind 2 How to Answer the Tough Question: What are Your Salary Requirements? 3 How Personal Finance Software Helps You Get More Out of Your Money 4 The Definitive Guide to Get Out of Debt Fast (And Forever) 5 35 Real Ways to Actually Make Money Online

Read Next

Advertising
Advertising

Published on November 20, 2018

The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

The truth is, there are many “money saving guides” online, but most don’t cover the root issue for not saving.

Once I’d discovered a few key factors that allowed me to save 10k in one year, I realized why most articles couldn’t help me. The problem is that even with the right strategies you can still fail to save money. You need to have the right systems in place and the right mindset.

In this guide, I’ll cover the best ways to save money — practical yet powerful steps you can take to start saving more. It won’t be easy but with hard work, I’m confident you’ll be able to save more money–even if you’re an impulsive spender.

Why Your Past Prevents You from Saving Money

Are you constantly thinking about your financial mistakes?

If so, these thoughts are holding you back from saving.

I get it, you wish you could go back in time to avoid your financial downfalls. But dwelling over your past will only rob you from your future. Instead, reflect on your mistakes and ask yourself what lessons you can learn from them.

It wasn’t easy for me to accept that I had accumulated thousands of dollars in credit card debt. Once I did, I started heading in the right direction. Embrace your past failures and use them as an opportunity to set new financial goals.

For example, after accepting that you’re thousands of dollars in debt create a plan to be debt free in a year or two. This way when you’ll be at peace even when you get negative thoughts about your finances. Now you can focus more time on saving and less on your past financial mistakes.

Advertising

How to Effortlessly Track Your Spending

Stop manually tracking your spending.

Leverage powerful analytic tools such as Personal Capital and these money management apps to do the work for you. This tool has worked for me and has kept me motivated to why I’m saving in the first place. Once you login to your Personal Capital dashboard, you’re able to view your net worth.

When I’d first signed up with Personal Capital, I had a negative net worth, but this motivated me to save more. With this tool, you can also view your spending patterns, expenses, and how much money you’re saving.

Use your net worth as your north star to saving more. Whenever you experience financial setbacks, view how far you’ve come along. Saving money is only half the battle, being consistent is the other half.

The Truth on Why You Keep Failing

Saving money isn’t sexy. If it was, wouldn’t everyone be doing it?

Some people are natural savers, but most are impulsive spenders. Instead of denying that you’re an impulsive spender, embrace it.

Don’t try to save 60 to 70% of your income if this means you’ll live a miserable life. Saving money isn’t a race but a marathon. You’re saving for retirement and for large purchases.

If you’re currently having a hard time saving, start spending more money on nice things. This may sound counterintuitive but hear me out. Wouldn’t it be better to save $200 each month for 12 months instead of $500 for 3 months?

Advertising

Most people run into trouble because they create budgets that set them up for failure. This system won’t work for those who are frugal, but chances are they don’t need help saving. This system is for those who can’t save money and need to be rewarded for their hard work.

Only because you’re buying nice things doesn’t mean that you’ll save less. Here are some rules you should have in place:

  1. Save more than 50% of your available money (after expenses)
  2. Only buy nice things after saving
  3. Automate your savings with automatic bank transfers

These are the same rules that helped me save thousands each year while buying the latest iPhone. Focus only on items that are important to you. Remember, you can afford anything but not everything.

How to Foolproof Yourself out of Debt

Personal finance is a game. On one end, you’re earning money; and on the to other, you’re saving. But what ends up counting in the end isn’t how much you earn but how much you save. Research shows that about 60% of Americans spend more than they save.[1]

So how can you separate yourself from the 60%?

By not accumulating more debt. This way you’ll have more money to save and avoid having more financial obligations. A great way to stop accumulating debt is using cash to pay for all your transactions.

This will be challenging, depending on how reliant you are with your credit card, but it’s worth the effort. Not only will you stop accruing debt, but you’ll also be more conscious with what you buy.

For example, you’ll think twice about purchasing a new $200 headphone despite having the cash to buy them. According to a poll conducted by The CreditCards.com, 5 out of 6 Americans are impulsive spenders.[2]

Advertising

Telling yourself that you’ll have the discipline to not buy things won’t cut it. This is equal to having junk food in your fridge while trying to eat healthy–it’s only a matter of time before you slip. By using cash to make your purchases, you’ll spend less and save more.

A Proven Formula to Skyrocket Your Savings

Having proven systems in place to help you save more is important, but they’re not the best way to save money.

You can search for dozens of ways to save money, but there’ll always be a limit. Instead of spending the majority of your effort saving, look for ways to increase your income. The truth is that once you have the right systems in place, saving is easy.

What’s challenging is earning more money. There are many routes you can take to achieve this. For example, you can work long and hard at your current job to earn a raise. But there’s one problem–you’re depending on someone else to give you a raise.

Your company will have to have the budget, and you’ll have to know how to toot your own horn to get this raise. This isn’t to say that earning a raise is impossible, but things are better when you’re in control right? That’s why building a side-hustle is the best way to increase your income.

Think of your side-hustle as a part-time job doing something you enjoy. You can sell items on eBay for a profit, or design websites for small businesses. Building a side-hustle will be on the hardest things you’ll do, be too stubborn to quit.

During the early stages, you won’t be making money and that’s okay. Since you already have a source of income, you won’t be dependent on your side-hustle to pay for your expenses. Depending on how much time you invest in your side-hustle, it can one day replace your current income.

Whatever route you take, focus more on earning and save as much as possible. You have more control than you give yourself credit for.

Advertising

Transform Yourself into a Saving Money Machine

Saving money isn’t complicated but it’s one of the hardest things you’ll do.

By learning from your mistakes and rewarding yourself after saving you’ll save more. What would you do with an extra $200 or $500 each month? To some, this is life-changing money that can improve the quality of their lives.

The truth is saving money is an art. Save too much and you’ll quit, but save too little and you’ll pay for the consequences in the future. Saving money takes effort and having the right systems in place.

Imagine if you’d started saving an extra $100 this next month? Or, saved $20K in one year? Although it’s hard to imagine, this can be your reality if you follow the principles covered in this guide.

Take a moment to brainstorm which goals you’d be able to reach if you had extra money each month. Use these goals as motivation to help you stay on track on your journey to saving more. If I was able to save thousands of dollars with little guidance, imagine what you’ll be able to do.

What are you waiting for? Go and start saving money, the sky is your limit.

Featured photo credit: rawpixel via unsplash.com

Reference

Read Next