Stock trading has been in existence for several years, but it had never seen an upsurge of investors as it had in the past few years.
The most surprising thing of all is that the trade market has witnessed traders from every age group, which includes teenagers, early 30s, and then, of course, 40 year-olds and more.
The last two don’t come as a surprise, but the first one does.
Trader or Investor?
One of the most important facts that you need to understand is that if you have associated yourself with stock trading, you will fall under one of these two categories: trader or investor.
A trader is somebody who keeps their eyes glued to the monitors, goes through different tickets, and buys and sells multiple stocks accordingly throughout the day.
On the other hand, an investor is a person who decides to buy a stock only after doing their research and isn’t keen to sell it away instantly. They prefer to sit on their stock and sell only much later when they spot a good opportunity.
Two Types of Stock Trading
Let’s see what are the types of Stock Trading:
Active Trading
In active trading, a person usually times the market and profits on its fluctuations in the foreseeable future. Like an investor, they too don’t buy too many stocks and keep their number somewhere around ten to twelve.
Day Trading
In day trading, a person focuses on incurring profit at the present moment. Instead of timing the market, they buy, sell and even close their positions on several stocks in a single day of trading.
Getting Started With Stock Traading
If you are trading for the first time, it would be ideal to do it through a reliable app like Arya. That way, there are fewer chances of things going wrong. Follow these steps to know how you should get started with stock trading.
Fix up a Brokerage Account
Several online platforms will let you set up a brokerage account in a matter of a few minutes. This is going to be your only means of buying, selling, or trading on stocks.
Decide on a Budget While Stock Trading
Newbie or not, you must never put too much money on the market. Whenever you are investing, keep in mind that there is a fair chance that you would lose all of that. Hence, decide on a budget that will not interfere with your daily life or other expenses.
Understand the Logic Behind Limit Orders and Market Orders
As soon as you are done with the two previous steps, you are set to buy stocks. While you go forward with that plan, you will be presented with two options:
Limit Orders
In the case of limit orders, you will be allowed to buy a stock at a specific price. In other words, if you have set your limit price at a lower rate than that of the market price, you will be prompted to get your hands on that once the price goes down.
Market Orders
In the case of market orders, you can buy the stock at the price available at that moment.
Don’t Expect too Much on the First Day While Stock Trading
A stock market is an uncertain place; therefore, there is hardly going to be something that you can confidently tell. In any case, some research and a general sense of the market is something you will earn with experience.
There are chances that you might get amazing returns on your very first day or nothing at all. Hence, we would always suggest you measure your returns against a proper benchmark and not have too many expectations on your opening day.
