The bad news is that these companies are just selling you the tools and services for you to be able to trade… earning a profit is up to you. If you make profit or lose your money, the company will get its fee for each trade anyway, so they’re happy to see you trade as much as possible. Since you have already decided to step into the stock market, let me tell you the first thing you want to do is NOT trade often because not only do you get to accumulate commissions but the chances of you making a profit if you trade often are a lot less if you were to just buy a stock and hold it for several years. If you want to make high returns, day trading is not going to do it.
Well, how can you get such returns? Easy, Buy low, sell high! Well, not that easy but that’s how you win the game of stock trading. Here’s an example of why it’s not that easy. Let’s assume you bought some stock and you got lucky and the stock went up 20% just a few days after you bought it. What do you do? Sell it or wait until it is up, say 50%? Do you listen to investor news and sell, buy, or hold the stock? If you hold the stock, are you sure it will go up? The truth is this is a very hard game to beat.
If you’re new in this game and not planning to spend much time on research, chances are you will lose a lot of money. Remember that you will be competing with professional traders, big players, and insiders. If you don’t do your homework, your chances are very slim to earn a profit. And let me add this, even professional investors, like Mutual Fund Managers, have a really hard time matching the performance of the market, let alone beat it. So, the odds are against you if you start trading and you think you know it all.
Fortunately, there are many investing strategies that if implemented correctly, can make you a lot of money. For example, value investing is a very popular technique and in fact it’s the preferred investing strategy of many of the World’s elite investors, including the most successful (and probably famous) investor in recent history, Warren Buffet.
But this value investing strategy, while straight forward, requires an enormous amount of time and an even bigger amount of patience to apply it. What’s worse, there may be times where your stock picks are losing money while the rest of the market is actually going up and you feel not just left out but doubtful about your stock picking skills.
This article was written by WeAreSEOguru
