I know a lot of people who are wondering how they could make money in ways beyond just their standard method earning an income. And many of them decide that they’re either going to make more bucks by
I think these are all great ways to make additional money, but here’s a word of caution. If you are going to get into the stock market, make sure you do it with both eyes wide open.
Should You Trade Stocks Online?
When I first started investing in the stock market, I thought I knew what I was doing. After all, I had been reading up on stocks and general investing topics through magazines and books for a few months before I decided to buy my first stock. But it turns out that the true lessons begin when you actually have money invested in the market. When you seen how the market treats your money for real, the lessons you learn stick to you longer and are revealed to you much faster. At least, that’s what I gathered from my own experience.
As I tried to develop financial strategies and my own investment plan for making money via the stock market, I realized that I wasn’t doing a few things right. I started out investing with my emotions, and by making wild guesses about where the market was going to head. I thought that by ordering a prospectus, checking up on a stock’s history or hearing a stock touted in a magazine or radio show gives a particular stock that extra edge that allowed me to trust it more than I would other forms of investment. It turns out that going down this path would eventually cost me a lot of money.
Over time, I learned that I would be most successful by diversifying my stock holdings (via indexing, asset allocation strategies and dollar cost averaging) and by being more “mechanical” about how to approach investments. Having a plan and divorcing yourself from emotion when investing will help your “game” better.
Now while I’m not a stock trader, I’ve decided to continue my investment education by doing a few things — things I should have done before committing my money to volatile individual stocks I’ve lost my money to in the past. If you’re going to trade stocks online, know that it’s hard to be good at it and that you’re likely to lose money on it than make any at all (over the long run). Small wonder people consider this a form of gambling. But if you’re gung ho about figuring out how to become effective and successful as a stock trader, then here are a few basic tips to follow:
What To Do Before Trading Stocks Online
- Study how both fundamental analysis and technical analysis work.
- Be more open to different forms of investing and expand your horizons when it comes to investing. While I used to be dedicated to the buy and hold strategy in the past, these days I believe that some market timing skills may be good to have.
- Look into using market tools, stock analysis tools like INO’s Trend Analysis, and doing more investment research (check out free videos like INO TV Free) to expand my knowledge of the investment world on an ongoing basis. Even if you don’t use this knowledge to become a stock trader, it’s still incredibly useful to understand how actual stock traders make money in the markets, and to see how the market works and how stock movements are analyzed. Here’s an example of a video that aims to educate you in the area of trading (using the MarketClub stock charting tool) — by focusing on a couple of tech stocks (AAPL and RIMM) and seeing how they compare:
We regularly show videos like this on our site. More of them can be seen through links we’ve provided below.
- Create practice investment or trading portfolios to get your feet wet first before committing your money to more risk-filled activities.
Here’s how I believe one should approach investing: always be prudent about where you put your money. Apply proper risk management by sticking with diversified investments and income sources. Continue to learn and to keep your mind open about investing. Consider using market tools that can improve how you invest and how you understand the markets.
For more on how to learn how to trade stocks online, check out these trading and investing videos (more are available through the investment research site, INO.com):
- A Stock Trading System For Shorting Stocks: How To Short Estee Lauder
- Use Candlestick Charts, Trading Signals To Evaluate The Stock Market
- S & P Index and Crude Oil Market Trends: Next Steps?
- Stock Market Index Analysis: Predicting An S & P Reversal
- Trading The Market: What Market Trends Are Stock Traders Riding On Recently?
- Technical Trading Indicators Predict That The Stock Market Rally Won’t Last