Whether you want to someday make investment your full-time job or you’re just dabbling for now, everyone has to start somewhere. However, as with almost any activity, mistakes are most likely early on – and when it comes to the stock market, those mistakes can have serious financial repercussions. In this article, we look at a few steps you can take in order to avoid these pitfalls and boost your chances of great returns.
Make the Most of All Available Practice and Research Tools
It’s tempting to plunge in and ignore all of the bells and whistles offered available on investment apps and platforms, but these special features should actually be a key consideration when choosing the best resource for your needs. Many offer the likes of paper trading tools, enabling you to practice trading and develop your skills and techniques without spending real money. They may also have knowledge centers and other sources of information that will teach you how to calculate probabilities, develop algorithms and discover patterns so that your approaches will be more informed and therefore more likely to yield impressive results. Be sure to compare all the features of a trading app or platform before you choose one.
One of the most important things you can do before you start trading is to set yourself some strict ground rules and limits. Deciding on a strict daily, weekly or monthly budget is a great way to make sure you never lose more than you can afford, and sticking to a certain field or type of investment will allow you to develop expertise in that particular area may prevent you from getting out of your depth.
Investigate the hidden costs and charges of any platform or interaction before you commit to it. For example, many newcomers to the world of investment don’t realize that they will be charged commission, often called a brokerage fee, every time they buy or sell shares. Make sure that you consider and compare all costs well in advance, and try to use tools that will make your experience a little more straightforward, not to mention affordable. A great option is to see here and look to use a stock trading mobile app that offers a commission-free trading platform, as this will help you to avoid spending too much outside of your intended transaction.
Actively Seek Information and Advice
Try to stay in the loop about the latest movements within the investment world. Things can change significantly in just a few hours, so there’s no excuse to coast along making vaguely educated guesses. Friends who invest can be very handy to have around, as you can share news and advice to improve each other’s chances of success. You should also regularly read up on the latest updates – but be sure to always double check where your information is coming from, as bias is common.
Unless investing is your full-time occupation, you shouldn’t let the stock market occupy your every waking thought. It can be easy to keep a tab open at work and glance at it every few minutes to see how your shares are doing, but this can become unhealthy. Obsessing over your investments can lead to overthinking, and this in turn can lead to poor decision making. Try to pick a specific period each day during which you will interact – perhaps making your decision based on the stock market’s busier and quieter hours, then leave it alone.
Updated September 13, 2020
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