Stock market investment is a form of smart investing that has gained a lot of interest and participation. The keyword “beginners learning to trade stocks” ranks among the top 10 most searched keywords during the COVID-19 pandemic. More people are interested in stock market investment as well because it teaches proper wealth management. Companies use the invested money to expand their businesses and provide significant returns.
People have become more serious about trading stocks to achieve the expected returns and earn passive income. However, smart investing is not that easy. Beginners learning to trade stocks should know what they need to do before investing. Let’s take a look.
Trader strategic tips that beginners should know before investing
- What is your investment goal?
- There are different types of investments, such as value investing (long-term holding) and profit-taking (short-term holding). Find the type that suits you.
- Open a stock portfolio with a broker because stock trading requires an account. Choose a reliable broker. There are two types of portfolios:
- Cash Account: Requires depositing money to be able to buy stocks.
- Credit Balance Account: A margin account that allows buying stocks without depositing money. In this case, interest is charged on borrowed money for trading.
- Understand the nature of each stock’s business. Some stocks are not involved in a single business. Beginners learning to trade stocks should study and understand the company’s business, growth opportunities, financial performance, etc.
- Start buying and selling stocks through streaming platforms, mobile apps, iPads, and computers.
How to read stock charts and identify simple buying, holding, and selling opportunities
Usually, stock charts are commonly viewed in the form of “candlestick charts.” These charts have two colors: red and green. Before starting real trading, you must study and understand the details of candlestick charts. To profit from trading, you need to acquire additional knowledge to outperform the stock market.
- Red candlestick: The closing price is lower than the opening price.
- Green candlestick: The closing price is higher than the opening price.
Simple buying and selling opportunities for beginners learning to trade stocks are to buy at low prices and sell at high prices. It is recommended to read stock charts for day trading to avoid rushing the buying and selling process.
How much should you invest, and which company should you invest in?
Strategic financial planning is the key to smart investing. Beginners learning to invest in stocks can start with as little as 1,000 baht. The minimum deposit amount varies among different brokers. You can invest with a familiar company that offers products or services you regularly use. If you have a rough assessment that the company has good prospects and growth potential, you can go ahead and invest, to ensure wealth management too.
Things that stock enthusiasts should continuously study
Whether you have been in the market for a long time or are a beginner learning to trade stocks, you must always learn and study.
That is the way to profit from stock trading because the market has various trading techniques, and it changes every year. To stay in the market for a long time, make profits, and achieve a smart investing plan, you should seek additional knowledge, learn new trading methods, study the stocks that interest you, and explore more strategic financial planning methods.