What Should You Know About Trading in Stocks?

If you are looking for something to venture into, then you probably have heard of the stock market. It consists of exchanges listed on a particular exchange. It brings both the buyers and sellers into one place and acts as the market for the shares of a particular stock. Traders are represented by brokers, which can be both physical and online brokers. Should you wish to learn to trade the stock market (เรียนหุ้น, term in Thai); you have to read this article up to the end.

Start trading in stocks, keeping in mind the following:

· Be mindful of your investing approach

You need to start with the basics, and that includes finding out your investing approach. Some people purchase individual stocks. To find out what trading approach works for you best, you have to assess your personal traits, such as if you are an analytical person and have ample time to dedicate to stock market investing.

· Know beforehand how much you are going to invest in stocks

Investing in the stock market tends to work better for the long-term than the short-term. If you need the money within the next five years, then the stock market might not work for you. Although there are a few investors/traders who were able to make money through short-term trading. You should not invest or trade money intended for things like:

– Children’s tuition

– Emergency fund

– Vacation fund

· Open an investment account

You will be required to open a brokerage account, which is typically offered by top notch companies like Charles Schwab and TD Ameritrade. The process of opening a brokerage account is simple and straightforward. It would only take a few minutes to have your account set up and working. When funding your brokerage account, your option would be EFT transfer, wire transfer, or email a check.

· Choosing a stock to invest in

There are plenty of stocks to choose from, but it is a must to conduct a background check of these stocks, especially the rise and fall and how they performed in the last few months. That way, you will be able to gauge if you are most likely to profit from that stock.

·       Diversify your portfolio

It is a must to understand the asset you are investing in. it’s a big mistake to invest in something you don’t have full knowledge about. As much as possible, you should avoid penny stocks. Most importantly, you have to know the basic metrics and concepts necessary for evaluating stocks. One important concept is diversification. It means that you should not put all your eggs in one basket. It would be a smart move if you put a variety of companies/stocks in your portfolio. That way, when one stock crashes, you will still have a backup.

· Continue investing

One effective way of making a substantial amount of money in the stock market is by purchasing shares of top-notch businesses at reasonable prices. Hold the shares for a period of time and so as long as the business remains profitable. Pull your investment only when you are in dire need of money.