Start Online Trading in Simple Steps
Trading stocks online is a great way to build your wealth and diversify your portfolio. It’s also remarkably easy: all you need is an internet connection and a brokerage account. As a leading financial advisor, SoFi suggests, “Trade stocks and ETFs, invest in IPOs at IPO prices or try automated investing. Plus, start trading crypto.” It’s good if you find all this in one place.
In this post, you will be shown how to set up an online trading account so that you can start investing in stock trading online.
Choose an online platform
You should choose a broker that is regulated and has a good reputation, track record, and customer service. You also need to be sure that the trading platform is reliable. The best way to do this is by reading reviews on forums such as www.forexpeacearmy.com or www.fxstreet.com where traders rate various brokers based on their experience with them.
Pick your stocks
To start your stock selection process, you need to look at the company’s financial statements.
You want to see if they have a sound balance sheet, which means they’re not in debt and have plenty of room for growth. Also, look at their business model and compare it with competitors or similar businesses in order to see if there are any areas where you can improve upon their performance.
To evaluate the potential for growth, look at what kind of market share they currently have (revenue share) versus how much room there might be left on that pie (market potential). You should also take into account how many competitors are out there with similar offerings—if too many companies are competing in a particular industry space, it could make it harder for you to stand out from the crowd.
Open your trading account
Next, open a trading account with a broker that offers the type of trading account you want. This can be made easier by looking for an online broker that is regulated by one of these agencies: the Securities and Exchange Commission (SEC), which regulates brokers that sell stocks and bonds; or the Commodity Futures Trading Commission (CFTC), which regulates commodity futures.
Decide how much to invest
The first step in deciding how much to invest in determining how much you can afford to lose.
If you’re starting out with very little capital, it’s easy for losses to be devastating. If this is the case, you should start with a small amount of money (such as $100) and gradually increase your investment over time as you build up more funds.
Investing all of your life savings in one trade will probably leave you feeling regretful and depressed if something goes wrong—so don’t do that! Start small and work up from there as needed.
Go ahead, buy!
Once you have made the decision to buy a given stock, you can then check its current price, and set a stop loss and target price for the trade. You should also be aware of how much money you are willing to lose on this trade in case it goes wrong.
Once you are satisfied with all these settings, go ahead and click “Trade” at the bottom of this page. This will take you through to the trading platform where you can complete your order by entering more details about what shares or funds you want to buy.
It’s easy to start trading online, especially if you know where to look. But, there are many factors you must take into consideration before making the decision to trade.