There is a strong belief that trading stocks for novice traders on the stock exchanges without a mentor is a risky and deliberately unprofitable business. This happens, but only for those beginners who are frivolous about online trading and do not delve into the basic principles of securities trading.
What should a novice trader know?
The content of the article:
- Which exchange to settle on?
- Why do you need brokers and how to choose them?
- Exchange strategies
- How do I start trading?
- Exchange trading secrets – are there any?
Which exchange should you settle on?
The choice of Russian stock exchanges for stock trading is quite modest – only two sites: MICEX and FORTS…
Trading in shares, basically, takes place on the MICEX, where it is worth settling for a start.
The operating principle of exchanges is quite simple: sellers and buyers fill out orders for the purchase and sale of shares in electronic form and send them to the computer system of the exchange.
The system automatically compares and analyzes orders, and then closes deals with similar conditions. After the transaction, the shares become the property of the buyer.
Why do you need brokers and how to choose them?
According to the legislation of the Russian Federation, a private person cannot independently trade securities on the exchange…
The purchase and sale of shares can only be carried out by a legally registered person holding a special license.
These legal entities are brokers – intermediaries between the client and the stock exchange. Brokerage firms charge a certain percentage for their services.
When choosing an intermediary, the following principles should be followed:
- Give preference to well-known companies with a positive reputation and good customer reviews (you can search for job reviews on thematic forums).
- Check for a license to work with stock exchanges.
- Choose a broker that provides an opportunity to work over the Internet. Study the program for accessing the exchange, its usability and cost.
- Specify the amount of commissions from each transaction, the amount for servicing and maintaining accounts, as well as guarantees of the reliability of the system.
- Find out how you can fund and withdraw money from your account.
Responsible brokers provide the client with a training program for working on the exchange, and the opportunity to practice on a virtual account.
Trading on the stock market without a strategy is a direct path to losses and disappointments, however, there are no 100% winning strategies either.
Market analysis, intuition and experience will eventually allow you to develop your own trading system, and at the beginning of the journey, you can use one of the classic methods:
- Follow the trend – buy shares during the growth period and sell them at the peak of activity at a higher cost.
- Invest – to conduct an economic analysis of the market and buy shares of companies that will grow steadily in the future in order to receive dividends from them.
- Use a pattern system – focus on the patterns of exchange trading and price changes, making transactions based on their analysis.
- Control and trend system – consists in the purchase of shares during a decrease in their price, with the expectation of further growth. This system is one of the most risky, so it should be used with extreme caution.
- Trading based on news – when buying, the main economic changes in the country and within companies are taken into account, the reaction to these changes in the securities market is calculated.
How do I start trading?
In order to start trading stocks, you need to choose a reliable dealing center and register there. Through the program of the center, open an account on the exchange and deposit money.
Download the trading terminal provided by the dealing center and the training program to your computer. After completing the training, you can immediately start trading or continue training with a virtual account.
Exchange trading secrets – are there any?
There are no magic recipes that guarantee the success of a trader on the exchange.
but there are several important rules, the implementation of which will significantly increase the chances of stable successful trading:
- Take your time and avoid spontaneous actions – it is better to miss one or two successful deals than to waste all your money.
- Try not to use the broker s borrowed funds (leverage) in a proportion greater than 1:50.
- Choose a simple strategy and explore its possibilities in different situations.
We have described only the main points of how to start trading stocks. Be prepared for the fact that you will have to study a lot, because ignorance of some nuances can seriously hinder your success in this field.