IT ALL STARTS WITH A TRADING ACCOUNT
It All Starts with a Trading Account
Almost every bank and lending institution is connected to a stock brokerage. That’s an arm of the company that has a relationship with the stock exchanges and executes stock market trading transactions according to instructions given to them from either a professional investment advisor working on behalf of the investor or directly from the investor. I’m hoping that you will be your own investment advisor, take the reins and have some fun with your trading. In addition to bank brokerages, I recommend discount brokerages such as Questrade ( only available in Canada), Motif Investing (a boutique concept),TradeKing and tradeMONSTER with international reach for stock trading as well as options trading. Initially, when you open a trading account with your discount brokerage you’ll transfer an amount of funds to your account which you have designated as your trading pool. Even though it’s recommended that you practice your trades with a dummy trading account (provided by your brokerage) to perfect your understanding of your trading method before using real money, it’s important to finally only trade with funds that you can afford to lose.
All trading is risky. All markets are manipulated. That doesn’t mean that you can’t win. It simply means that you need to keep abreast of the most current information in your chosen trading field. Everyone has heard the adage “Buy low and sell high”. Buy low describes our entrance into the market. It tells us to buy a stock when its price is low. Sell high indicates our exit from ownership of a stock. It tells us to sell the stock shares when the price is high. In a perfect world that’s exactly what every investor would do and enjoy the rewards of the increase. In the real world, however, that is often not the case. We humans have emotions. We get panicky and we have fear. We want to bail out when the price drops. We also get greedy and stay too long at the party. We have a difficult time selling shares when the price is rising. Therein lies the rub. It’s this emotion thing that has led to the creation of software that can make all those decisions for you based on hard cold facts without emotion. They are appropriately called Robot Investor Software. I’ll touch on those in a later post and give my recommendations.
In this website I’ll cover several trading methods for you to try. None of these are rocket science. They are all very learnable. You’ll find Penny Stocks enticing and as the name suggests, the shares are very inexpensive. Foreign Exchange Currency trading or Forex for short is fascinating and fast moving with major currency values changing relative to each other moment to moment in real time. Options are another way to trade stocks using leverage without requiring a great investment. I discuss precious metals mining shares separately because they are shares whose prices are affected not only by the success of the mining company behind the shares but also the intrinsic value of the metal being mined. Then there’s my personal favourite, bullion. The physical hold in your hand, refined and minted precious metal in the form of coins, bars,and wafers.
But first things first, it all starts with a trading account.
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Hand Showing Graph, image courtesy of worradmu at http://www.freedigitalphotos.net
Business Man and Risk, image courtesy of kibsri at http://www.freedigitalphotos.net
Bags with Currency Symbols, image courtesy of digitalart at http://www.freedigitalphotos.net