Skip to main content

Share trading: Getting the hang of the basics



Getting into share trading can be difficult. Well, getting into it is easy, especially with the abundance of online trading accounts out there. Getting it right however, can be tough.

Novice traders can find the whole process of deciding what to invest in, buying shares, selling shares, and knowing when to enter and exit the market somewhat daunting. And for good reason – it is daunting, and there is a lot to know.

Get informed

Before you start trading, it is highly recommended that you find out as much as you can about the market and the kind of trading you want to do. This may take a while, but getting a good grounding makes it much easier to succeed, and allows you to learn from your mistakes and the mistakes of others.

There are various investor starter guides available online, so check them out as a starting place. There are also dozens of websites dedicated to helping investors make decisions. Make sure the advice you take is credible, and use your common sense.

Create a trading plan

Whether you trade full time, after work or just as a hobby, it’s important to understand that trading is a business, and to treat it as such. That means making a trading plan. A trading plan is to trading, what a business plan is to business. You need one if you plan on being successful.

A trading plan allows you to set down goals and guidelines for trading. It allows you to identify your attitude to trading and to risk, and it sets out entry and exit strategies to follow. Having this all in writing makes keeping to your own rules much easier, preventing you from making impulsive decisions and trading mistakes – even when market conditions get hectic.

In order to create a trading plan, you should ask yourself the following questions:

Regarding your current situation
What kind of trader are you?
How much experience and what skills do you have?
How much capital do you have to trade with?

Regarding where you want to be
What do you want to achieve from trading?
What timeframe do you have?
What is success to you?

A trading plan can help you:

·         Identify and learn from your mistakes
·         Manage your risk better
·         Identify and keep to your entry and exit strategies
·         Stay focused on your trading strategy (if you have one) and keep faith in it
·         Evaluate the success of your trading, and make changes as needed.

Create a trading strategy

Some traders swear by strategy trading, some are not that bothered. As you become a more experienced trader, you may create a trading strategy. Read up on this process and how to test out your strategy to ensure you can rely on it.

Get some practice in

Once you know everything you need to know about the market and what you want to invest in, it’s time to get involved. Some online trading accounts allow you to do some paper trades (pretend trades) to get you started. Once you’re ready, start trading!


It can be a good idea to start out small and stick to large companies known for their stability – however, what you trade and how much you trade is completely up to you. If you are still unsure, you may want to seek the advice of a professional.

Comments

Popular posts from this blog

Win a XXL'MAN SIZE' Faux Leather Bean Bag for Fathers Day

I have a fab competition for you to win a  Man Sized Bean Bag just in time for Fathers Day from Bean Bag Bazaar , which is worth £69.99. We are big fans of bean bags as they make perfect additional seating and can be popped in the garage when not in use and we are looking forward to reviewing one in Maxi's new bedroom . a Rafflecopter giveaway

Dumping the tumble dryer and Ecoforce giveaway

We have a tumble dryer, but it broke before christmas and we  couldn't afford to get it repaired, so I have been managing with an old fashioned wooden clothes rail and hanging bedding over the doors to dry, This last would of weeks however, I have been hanging the washing outside and it has been drying much quicker and with less creases, so I am going to take the plunge and instead of getting the dryer replaced I am going to give it away. Ecoforce heard me on twitter bemoaning the fact that I was chasing laundry round the garden as my pegs were not working and very kindly sent me some of their Ecoforce pegs to try and they have been fab. So in conjunction with Ecoforce I have a year's supply of green cleaning and washing up wonder products worth £50 comprising the following: EcoForce Peg Basket x 1 EcoForce Clothes Line x1 EcoForce Pegs x 2 packs Several of each of: EcoForce sponges, scourer...

Win a £60 Amazon Voucher with Barclaycard Freedom Rewards and A Thrifty Mum

Barclaycard Freedom Reward Card asked me to take their  60 second survey to see what shopping tribe I was part off .   Barclaycard and Brunel University have collaborated to research the modern way in which we shop and how UK shoppers can now be defined into four new shopping tribes.  I am a Bargain Hunter Gatherer: You're an expert at collecting the best tools, voucher codes and loyalty cards to make your budget go as far as possible, week in, week out. While the kids are doing their homework, you're doing yours - grabbing the best savings for your family. Key facts about you: You're most likely to be female, married or living with your partner and living in the north of the UK. You lot are busy. Two thirds of you cleverly juggle your home, work and financial life. You're not easily tempted by big discounts, only 35% of you have ever bought a non-essential item you didn't need because of a special offer. Home really is where the heart is - 42% of you...