Did you know that the average stock owner is likely to be investing through retirement plans and mutual funds? However, more people than ever are investing in the stock market thanks to the advancement of technology.
It’s becoming more common for the average individual to want to learn how to buy and sell stocks on their own to make money. Investing can be a great hobby and a side hustle if you do it right.
Keep reading to learn the steps to take to start investing.
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Choose an Online Stockbroker
Learning how to buy and sell stocks is easiest through an online stockbroker. Open an account and add funds to it to be on your way to buying stocks in a few minutes.
You’ll buy stocks through the broker’s website with this method.
If you can’t find an online stockbroker that you like, you can try a full-service stockbroker or buy stock straight from the company.
Buying and selling stocks takes quite a bit of research. A brokerage account might have tools to help you pick stocks. As a beginner, the best place to start is by researching companies you are familiar with as a consumer.
After identifying the companies you are interested in, check their annual reports. A management letter to shareholders is a specific document you’ll want to read.
On the broker’s website, the following information and tools should be available:
- SEC filings
- Conference call transcripts
- Quarterly earnings updates
- Recent news
Check if the website also has a basic seminar for picking stocks.
When stock trading, you’ll want to diversify where you place your money. You can expand your portfolio to international markets at www.monexsecurities.com.au once you get the hang of buying and selling.
For first-timers, one of the best stock trading tips is to start small. If you can handle the pressure of the market changes, add to your position over time.
Depending on the online stockbroker that you choose, you might be able to buy fractional shares of a stock instead of a full share. This is perfect for those who have a small budget but still want to divulge in the more expensive stocks.
Find a tool that converts your budget amount into shares to get a good idea of where you can put your money.
Choose a Stock Order Type
There are a lot of advanced trading moves and complex order types that you don’t need to know when you start. In fact, the average trader sticks to market order and limit orders only.
A market order places no price parameter on the trade and is executed immediately. A limit order allows the trader to have more control. Your order will be executed when the asking price drops to a certain level.
Learning How to Buy and Sell Stocks as a Hobby
With the simple tips in this stock trading guide, you should have a good idea of how to buy and sell stocks. Often, new traders want to learn the process as a hobby.
The best way to start making money as a beginner is by creating an account with an online stockbroker. From there, you should have all of the tools and information you need to trade right away.
For more financial tips or to learn more about the stock market, check out the other posts on our blog.