Items you will need
- Trading account
- Funds for your account
In today's world of online investing, becoming a stock trader is no longer an impossible task. By using an online trading account, It is possible to trade on your own without ever speaking to anyone. Many websites allow you to be a stock trader. You can trade stock online on either a part-time or full-time basis--all from the comfort of your own home.
Do some basic research and read up on investing. Many novice stock traders lose their shirts early upon entering the market because they aren't prepared. Don't get eaten by the sharks. In the stock market, knowledge is power.
Speak with friends who are stock traders themselves. If you have friends or colleagues who are in the market, ask questions. You may have decades of experience and insight at your fingertips. Many investors are happy to give beginners advice. Always make sure to research any suggestions you receive.
Sign up for a brokerage account. Scottrade, Tradeking, and Etrade are just a few of the many options. Scottrade and Tradeking are bare-bones brokers that have very low minimum account balances and commission fees. Etrade is a bit more expensive because it offers more features and hand-holding.
Deposit funds into your account. Once you have signed up and chosen a brokerage firm, it is time to deposit funds into your trading account. Once your funds have been cleared and received, you are ready to start trading.
Research companies whose businesses you are familiar with. For instance, if you have worked with computers, it may be a good idea to invest in a computer or related tech company. Billionaire Warren Buffet said he never invested in companies he didn't understand. That is why he avoided the original Internet boom in the 1990s. Stay with what you know and you are less likely to get burned.
Before you invest in stocks, you need to know what your trading goals are. You may want to play it safe and invest in strong companies with a good track record. Or, if you are trying to get rich quick, you will likely invest in more speculative stocks from companies that are unproven. Unproven start-up companies can go bankrupt and leave you penniless. However, if they excel, you could rake in a fortune. Remember, there was a time when even Google and Yahoo were unproven stocks.
Once you have decided what type of investment you want to go after, log into your trading account, and buy your stock.
Monitor your stock's progress. Track its price to note if it has gone higher or lower. If good things are happening for the company and its sector, the stock may go up in price. If the reverse is true, the stock may go down in price.
Sell your stock. If your stock has gone higher and earned you a significant profit, it may be time to sell. However, you may want to sell only a portion of stock that is rising. This way you can retain some of the stock in case it keeps going higher, while taking some profits now to invest elsewhere. If your stock is doing poorly, you may want to sell and cut your loses before it goes any lower and takes an even bigger bite out of your portfolio.
Repeat steps five through nine. Once you have bought and sold your first stock, it's time to continue buying and selling. You will eventually own several stocks at one time. As you gain experience, you can consider getting into more advanced concepts like selling short and options trading.
There is a saying in stock investing, "Bulls make money. Bears make money. Pigs get slaughtered." Do not let greed influence your decisions. Stock investing should be a nonemotional and scientific endeavor.