Beginners Guide To Share Trading
Beginners Guide to Share Trading
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With some training, a plan and some research, it is possible to learn how to become a successful Stock and Share Trader. Just take your time, step by step. Soon you will build up your experience and get a style of trading that suits you. That way you will gain an edge and achieve a far higher degree of success. Great Information on Share Trading Courses are available from Share Trading Course where you can see which courses are currently being run.
There are some golden rules that ones need to follow.
- When starting why not open a demo account and trade with Monopoly money so that you can make some mistakes without any losses costing you a dime.
- A must have is a reliable internet connection to be able to trade the Stock and Share markets. Nothing worse than trying to trade or adjust a stop loss and you have no access to the market.
- You can use leveraged products that allow you to trade a higher volume of shares using only a deposit. These products are offered by various market makers and they come in two forms. Spread betting is one type of product and CFDs, Contracts for a difference is another one.
- These leveraged products allow you to deposit say £500 and then be able to trade shares to a value of say £5,000. The exact figure varies on the Stock involved and its marketability and the market maker. Some market makers can offer better deals than others on certain Stock and Shares so it pays to shop around.
- However, when using any form of leveraged product you must be aware that losses can exceed deposits so you MUST ALWAYS have a stop-loss to control your exposure. Even then the stop loss may not apply immediately in view of an immediate crash in a stock price. So be aware that you can lose more than your initial deposit when using any kind of leveraged product. Again go step by step and take your time.
- There are quite a few strategies one can you use which if constantly applied in a steady, cool and calm way will generate quite good profits. Obviously, not every trade will be profitable but we firmly believe that a very high percentage should be.
- Those that are not profitable will have incurred a small loss which would have been limited by your stop loss. I cannot stress how important it is that when using any form of leveraged trading a Stop Loss is essential as losses can exceed deposits.
My simple strategy is that when a trade is above break even, I adjust the stop loss so ensuring that no loss can be made and in time lock in profit until I see that my profit target has been reached. At this time I either sell and take the profit or set a much tighter stop in the hope that there may be more juice to come from the trade and if not, then the tight stop loss will ensure a good profit.
On our Beginners Guide to Share Trading course we cover the following points plus many more :-
- Opening a Stock and Share Trading Account
- Market makers that are available
- Why you need a trading plan and how construct one.
- How to identify potential trades and where to look for them
- Why you must ALWAYS use a stop loss
- When not to trade
The above are just a few of the points we cover. We strive to ensure that each and every attendee goes away with the ability to start to trade and trade profitability.
Always use a Stop Loss
We do caution, though, that at first, one takes one time so as to get some experience. Always use a stop loss and check that the stop loss is actually in place.
As perhaps you can guess I am writing from personal experience. I’m a real trader trading nearly every day depending of course on market conditions, existing positions. And very importantly what is going on in the world.
I tend generally not to be a day trader in that I take a position and I wait for that trade to mature. And then I take my profit. The time factor could be as short as two days and sometimes weeks. If the trade continues to move then, of course, I stay with the trade. Let your profits run Cut your losses!
The biggest mistake that I see with investors is that they often sell the shares in their portfolio that are going up. Having sold them they still keep going up. Then they often buy shares that have come down in price thinking that they have a bargain. Of course more often than not these shares continue on their downward trend.
It pays to trade the trend. If Shares are going up then its often best to hold on and even add to ones position.
If Shares are going down that’s great if you are shorting the share but if not consider if you original investment thesis still remains. If it does and assuming we are talking about a long term buy and hold I see no reason why not to continue to hold.
But be wary as often the market reads ahead of profit warnings and often weakness in a share can be a good sell signal.
Remember only Trade with money that you are prepared to lose.
There is a big difference between Investing and Trading. One that you can only really learn by expereince. I think its a good idea to trade with say 25% of your funds. Lets say the market moves up you can set a stop loss and perhaps increase your position. If the market moves down you can watch your position and take a small loss if you see no up trend coming. But lets say you have a prime stock now that the price has fallen perhaps thats an opportunity to increase your position. Obviously you need to do your own research.
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