Stock Trading and Investing : A Guide for Dummies!
Stock trading and investing in the stock market can be a lucrative full-time or part-time occupation if you have enough experience and knowledge of the market, company fundamentals, technical know-how, and many other aspects. Whether you are an investor or a trader depends upon the frequency at which you are buying or selling stocks or other assets such as cryptocurrencies or fiat currencies.
If you are a beginner, you should go through this guide to learn the basic aspects of trading and investing in stocks.
What Is Stock Trading?
Trading of stocks involves buying and selling of stocks on daily price fluctuations. The traders have a short-term outlook on the price movements of stocks in the market. They make a few bucks on favorable price movements in a few minutes, hours, days, or months.
There are mainly of two types of trading stocks:
- Active Trading and
- Day Trading
A trader is said to be an active trader who makes at least 10 or more trades in a single month. These kinds of active traders use strategies that involve timing the market. They take advantage of short-term events affecting the market sentiments on the company level or overall market. They usually buy and hold stocks for a week, months, or a few months to make a profit.
Day traders employ trading and investing strategies on the basis of range (based upon supports and resistances), news, different investment products, and other factors to make multiple profits throughout the day on the basis of the price fluctuations of stocks. They usually choose those stocks that have high liquidity. Day trading usually involves buying of stocks and selling them within a single trading day.
How To Start Trading Stocks?
If you want to trade stocks or any other asset such as cryptocurrencies or forex, you must have a trading and investing account with exchanges/brokers for stock. To start trading stocks, there are 6 steps involved:
Step #1: Open a Brokerage Account
If you want to buy and sell stocks, you have to do it through a broker. That’s why it is important to open a brokerage account. It will enable you to hold investments. To open an account, it’ll take just a few minutes.
Step #2: Set a Budget for Trading Stocks
No matter how talented you are in stock trading, you mustn’t allocate over 10% of your portfolio to individual stocks. This is because too much exposure of your savings to high volatility may cause irreparable damage to your financial viability.
Do’s and Dont’s of Stocks Trading
For managing risks of trading, you must also follow these dos and donts:
- You should invest/trade only that amount of money in stocks that you can afford to lose. Analyzing one’s risk tolerance is very important.
- Don’t use any kind of money that you have earmarked for making essential payments (such as tuition or down payments) or near-term ones.
- If you don’t have a healthy emergency fund, then decrease the 10% allocation of your portfolio to individual stocks. In fact, try to invest 10-15% of your income into the retirement savings fund.
Step #3: Learn how to use Limit and Market Orders
Once you have opened a brokerage account and also sorted out your budget, you should use the trading platform for placing orders for stock trading. Many options of iorder types will be displayed to you including:
- Market order: This purchases or sells a particular stock at once at the best available price.
- Limit Order: You can set limits for buying or selling a stock. The limit of a buy order is the amount of money you are willing to pay. This means the buy order will be executed only if the price of the stock goes down below that certain amount.
Step #4: Practice Trading of Stocks with a Virtual Trading Account
You can open a virtual trading account at leading brokers such as Interactive Brokers and TD Ameritrade. With the help of virtual trading tools, you can have a hands-on, low-pressure experience of trading.
Step #5: Measure your ROI
Your ROI must be more than that of the benchmark indices including Standard & Poor’s 500 index, Nasdaq composite index, and other smaller indices. After investment and curtailing the associated fees of trading, you must measure the return offered by your stock investment. This will help you to know whether you are on the right path.
Buy Stocks and Cryptocurrencies Now
If you are ready to invest in stocks and cryptos or buy Bitcoins through online brokerage accounts of centralized or decentralized cryptocurrency exchanges, you can do so in a legit way by investing through stock investing and cryptocurrency apps. You have to open an account with such an exchange or online broker, verify details (including basic personal information), and then fund your stock or cryptocurrency trading account.
The best thing about Bitcoin and different types of cryptocurrencies is that the transactions are done without the intervention or involvement of central banking authorities or other banking entities. This is one of the reasons why more and more investors (including corporates, venture capitals, and institutional investors) are heavily investing in Bitcoin or other cryptos.
You can start depositing funds to your stock or crypto exchange account to buy company shares or cryptocurrencies by connecting your bank account (savings accounts, checking accounts, or other account types) or transferring fiat currency money online through bank transfer, credit cards, debit cards, and other payment options.
If you need further assistance, you may consider taking help from the vibrant and helpful cryptocurrency communities. You can trade cryptos with credit cards (business credit cards or personal ones), debit cards, or other payment options through reliable crypto trading platforms.
You can also check the savings calculator to know how much you should save on a weekly, monthly, or yearly basis. Check the financial news to know more about the prospects of various assets so that you can build long term wealth.
In case you are bullish on the future prospects of Bitcoin BTC, Ethereum ETH, Bitcoin Cash BCH, Litecoin LTC, and other altcoins, you can start investing in stocks, Bitcoin, and other altcoins with USD. Then transfer them to hot wallets (including mobile app wallets and software wallets) or cold wallets (including most secure hardware wallets) and hold them for a longer time period for a significant price appreciation. Keep your XRP safe with Ledger Nano S, Trezor One, other Ledger and Trezor models, or other popular ones.
This will help you get a higher return in the long run, much more than investing in stocks, mutual funds, index funds, real estates, yield savings accounts, real estate investment trusts, fiat currency trading (forex trading), CD rates, money market returns, exchange traded funds, IRA accounts, and others. In fact, many retirement funds or IRA accounts such as Roth IRAs are allowing cryptocurrency investors to purchase XRP, Bitcoin, Chainlink, and other digital assets of investment in the portfolio so that the prospects of these funds increase due to the higher returns of cryptos. If you are thinking about building wealth, you should include cryptos in your portfolio like other crypto investors.
Therefore, it can be concluded that holding Bitcoin Ethereum and other cryptos can help you to build real wealth and multiply your net worth. You can learn investing basics to buy crypto currency and other digital assets to make more gains. You can start going through Wall Street Journal and other investing magazines on cryptos to learn more about investing in cryptocurrencies and make better financial decisions. You can learn about valuation calculation to true bitcoin value and assess the overpriced or underpriced situations instantly.
As a beginners guide, you may also check out the trading basics provided by various cryptocurrency exchanges such as Coinbase, Binance, Kraken, and others. There are many brokers for beginners as well. So, read reviews of customers before joining a crypto exchange. There are many brokers for beginners in the USA through which you can trade and invest in fractional shares and stocks funds.
You should definitely learn about
- Trading for beginners (Stepbystep guide)
- Types of stocks including penny stocks, value stocks, growth stocks, blue-chip stocks, etc.
- Stock plans
- Fixed income assets
- Stocks and Funds
- Asset allocation
- Utilizing market news for profit
- Different trade ideas
- Warren Buffet’s investing styles
- Passive investors
- Different investment goals
- Cash Management
- Investing for beginners
- How to choose brokerage firms and stock exchanges?
- Using price actions to one’s advantages
- Margin Requirement
- Margin Call
- Margin Account
- Daytrading Margin
- Trend Trading
- Market Maker
- Options trades
- Fundamental Analysis
- Short Sell
- Market Research
- Success Rates Of Day Trades
- Trading Vs Investing
- Swing Trading
- Time Frames Of Trading
- Successful Ways Of Buying Stocks And Cryptos Throughout The Day
- Risk Management
- Financial Industry Regulatory Authority
- Trade On Margin,
- Foreign Exchange Trade
- Pattern Day Traders
- Day trading rules
- Active trading
- Secrets of a successful day trader
- Stock price actions
- How to pay off debt quickly
- Planning for retirement
- IRA guide and fruitful ways of increasing returns of individual retirement accounts
- Stock price determinants
- Charles Schwab’s modern approach to investing and retirement
- Day Trading Tools, trading software, and different financial tools.
Defi tokens and NFTs (Non Fungible Tokens) are the next generation of crypto coins. These decentralized coins have started to become very popular among traders who trade cryptocurrency. You can buy and sell them through cryptocurrency trading platforms too. Whether you buy Ethereum ETH or buy Dogecoin, you should also invest in Chainlink LINK, Litecoin LTC, Binance Coin, Cardano ADA, Polkadot DOT, Dogecoin DOGE, and trade Litecoin LTC for better diversification of coins. To diversify your portfolio, you may also buy stocks through stock brokers.
Get better guidance on improving your personal finance, retirement planning, management of cash flows or capital gains, and investment ideas from financial advisors, investment managers, and wealth managers, especially the ones who are not averse to cryptocurrencies such as Bitcoin and others.
While day trading, you should always try to invest only that much which you can afford to lose money. When you do margin trading, be very careful. Financial protection must be there in your mind always while you make cryptocurrency trades. That’s why having a secure financial plan is so important. Invest money in stocks and other cryptocurrencies through centralized or decentralized exchanges and reliable online brokers.
Choose Cryptocurrency Copy-Trading Bots to Increase Crypto ROI
Cryptocurrency Trading Robots (such as NapBots.com) automatically scan the market in real-time and trades for you. They run 24×7, which means that you can keep earning your passive income even when you are sleeping. This gives you an edge over other investors as it enables the bot to book profits on your behalf when other investors are sleeping.
Smart crypto investors always remain prepared to get the best of a big market move. They don’t wake up suddenly. To remain alert round the clock, they use cryptocurrency trading bots so that they don’t miss any big market movement.
NapBots.com is a Trading Bot, cloud-based platform, on which you can connect to major exchanges such as Binance, Bitmex, Bitfinex, OKEX, Kraken, Bitstamp, and Bitpanda.
The best thing about the Napbots trading software is that you don’t have to monitor charts and candles to predict your next move. Any novice trader with zero skills can also start trading like a pro and earn money with this unique trading tool. Let Napbots take full control over your trades in just a few clicks. Now, sit back and enjoy earning money.
You may also check “Napbots Review – Simple Way To Increase Your Crypto Returns” before taking the plunge.
What’s so special about NapBots?
NapBots crypto trading software is special because it comes with:
- A unique trading algorithm that processes market data for you
- A unique crypto trading bot library so that you can create your own mix of trading strategies
- Autopilot mode that enables you to automate trading 24×7
- An easy-to-use interface so that you can copy the proven strategies of NapBots to make successful trades and make money
How does NapBots help you to Make Money?
With NapBots, you can enjoy financial independence by trading cryptocurrencies on autopilot mode and earn money automatically. To make it work on your behalf, you have to do the following:
Step #1: Connect to one of the available trust exchanges.
Step #2: Select from the unique list of performing Bots of NapBots
Step #3: Choose a plan that suits your investment style
Once you have completed these three steps, NapBots is ready to trade cryptos and earn money for you. Happy Trading!
Why Choose NapBots?
- NapBots offers complete trading automation solutions through the use of its own tested trading strategies; offering quantitative trading strategies previously reserved for hedge funds to the public.
- The setup and installation process are easy. So, the non-experts can also use it. The simple and special approach of NapBots helps it provide you with excellent ROI.
- The team of professionals behind NapBots has extensive experience in the financial market. They have put their years of experience in place so that you can easily automate the management of your funds with no technical skills. This service can run 24/7 and work as your passive source of revenue even when you sleep.
Are You Ready To Start Automating Your Passive Income Now?
If you still need assistance, you can refer to the following guides:
- How to invest in crypto currencies like a pro?
- Should you invest in bitcoin and crypto currencies?
- The 3 best ways to invest in gold
- Stock trading and investing
- Everything you need to know to invest in cryptos
- What you should know about crypto taxes
- How can you minimise your crypto taxes
- What is the next bitcoin investment like?
- Big tech push toward crypto currencies
- Religion and trading cryptos
- Muslims in bitcoin and cryptocurrencies
- Trading in India: Is the government planning to ban cryptocurrencies?
- Can become bitcoin a safe investment?