New investors often take baby steps as a way of educating themselves on the basics of stock trading. While it’s important that you have access to reputable sources of quality education and resources, you should also expect a trial-and-error phase at the beginning.
Stock trading is not a sprint; it’s a marathon. You don’t have to learn everything overnight. Some investors have spent a lifetime honing their skills and are still learning something new each day.
Here are five ways to jump into the fray and learn the nuts and bolts about a profession that dates back to one of the first joint-stock companies, the Dutch East India Company (founded in 1602).
1. Review the online financial news
The news sites of Yahoo Finance and Google Finance are great resources for new investors. Just by reading headline stories, you can familiarize yourself with different stock terms that will become important for you as you progress.
Checking the stock chart of various exchanges, finding quotes on specific stocks of interest, and studying fundamental data regularly are good first steps.
2. Understand trends
Wall Street is known for the old saying, “the trend is your friend.” Learn where the trends are and what indexes are leading in each industry; e.g., oil, technology, banks, biotech, etc. If you don’t understand where the trend is, subscribe to a technical analysis site to learn.
One simple indicator you can use for trends is to look at business magazine covers. When you see a lot of_ bears_ , it’s a period of uneasiness and downward trends in the market. It signals conservative buying. The cycles between bears and bulls can be short or long; it’s just important for you to be aware of which is occurring at a give time.
3. Paid subscriptions
Paying for research and analysis can be both educational and useful. Listening to market professionals is sometimes easier than to try to learn from books and financial periodicals. There are many paid subscription sites available including_ Dan Zanger_, Investors.com, and Morningstar, just to name a couple.
4. Check your EGO at the door
You’re a newbie. Don’t think after some initial successes that you know everything you need to know. Even the best traders get cocky. That can cause complacency and losses down the road.
5. Learn from the pros
These are the people who are actively participating in the market: the professional traders! Many have really good systems that you won’t find in any book. Some have honed simple technical analyses that may work for you.
Technical analysis will teach you when to get in and out of a particular stock. This is helpful whether you want to be a short- or long-term investor.
Trading Concepts is such a resource. It features valuable information and success stories from a team of professional traders. They are one of the oldest, most respected trading educational companies in the industry, and have taught thousands of folks just like you how to become independent and consistently successful traders.
Nothing comes easy without practice. While the tips above will get you headed in the right direction, you need to get out there and learn by doing. While you’ll absorb some things by osmosis, the rubber hits the road when you start investing and tracking the results.
With a little motivation and perseverance, you’ll progress past the newbie stage in no time.