What Is The Best Way To Learn To Trade?

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An Introduction to Trading Stocks

Stock trading is an ever-increasingly popular phenomenon. Today, we have the potential to trade right at our fingertips. All we need is know-how from reliable sources, the right mentors, and a certain level of determination. When it’s done right, trading can provide some lucrative financial opportunities. That’s one of the reasons behind its popularity, as more and more individuals make that first leap into trading stocks. Make the right trade, get your timings right, and you could even be set for life.

You’re likely to have come across someone in the past, perhaps a close friend or even a co-worker, that’s mentioned trading to you before. You might have even found yourself wondering what on earth trading entails. Those who do trade will have no hesitations in telling you just how much you’re missing out on by not making use of the stock market!

So, you’ve found your way to this article as you’re curious about how to trade stocks. The trading world is full of confusing jargon to wrap your head around to begin with. Taking the first step in learning how to trade can be daunting. But don’t worry - that’s where we come in! If you’re thinking about learning to trade, the first step to take is right here. In this article, we’ll uncover exactly what stock trading is, and how you can utilise the resources out there to your advantage. We’ll discuss tips for learning to trade, which strategies you might find most useful, as well as some of the ins and outs of the stock market that you should start familiarising yourself with.

What is Stock Trading?

Stock trading is the process of investing in the stock market. You can purchase shares from publicly traded companies, even the major names such as Amazon, Facebook and Apple. Those who invested in shares from these companies early on (and stuck with their investments) have now amassed huge amounts of profit, simply because the company grew successful and the value of company shares therefore increased.

Stocks must be bought and sold in order to be traded. That is, if you’re selling a share; someone on the other end of the market is buying your particular share. Once shares in a certain company become more in demand, the value of those shares will rise. Or, if shares decrease in popularity, the value of those shares will fall.

Stock trading involves careful speculation concerning when and how the value of shares appreciates or depreciates. This level of insight can take years to master, and only when you’re willing to put the effort in, might you begin to see the positive payoffs.

What is Forex Trading?

A lot of the time, stock trading resources refer to something called “forex trading.” Forex is simply the abbreviation for the combination of words ‘foreign currency’ and ‘exchange.’ Forex trading works on an international level, as companies aren’t limited to trading solely within just one currency. Globalisation means forex trading is on the rise, in comparison with traditional stock markets that are based only in one currency. For example, the New York Stock Exchange (NYSE) is based on the US dollar.

When using forex trading solutions, however, you can purchase from the NYSE in your own currency, which is then converted into USD in order to make the purchase in the correct US currency. The USD value of the shares are then converted back into your own currency, so you can see exactly how much assets you have without having to convert to work it all out.

Deciding whether you’ll use forex trading or more traditional stock trading, such as blue-chip trading, depends on the kind of method you choose to trade with. Some people prefer to ‘buy and hold,’ which is where they wait for the value of shares to increase gradually over time. Other traders, such as ‘day traders,’ prefer the unpredictability of forex trading, as the prices of shares are likely to change much more frequently.

What are the Best Resources to Learn How to Trade?

As trading has become a popular money-making pastime and even a career for many of those who succeed, the amount of resources available today have skyrocketed. If you’re interested in learning how to trade on the stock market, Trade Room Plus can be a great place to start. As the industry leaders in UK forex and index trading, their services cater for all learners from the very beginning of their trading journey.

In teaching others how to trade, they use a system where learners can watch the experts trade live on their Youtube and through other channels. This means you get insights as to exactly how the pros trade. Trade Room Plus have great resources surrounding how to trade successfully. Being able to watch experts trade live means you can fully put your trust in their methodologies. They also offer Copy Trading opportunities, whereby an expert trader will trade for you – in your name. You’ll reap the profits, without having to learn the intricacies of stock market trading. A win-win situation!

Tips for Learning to Trade

It’s always important to remember that stock trading isn’t a ‘get rich quick’ scheme. It involves investing your time, not just your money. Once you begin to get to grips with exactly how the stock market works, you’ll understand much more about the fundamentals of trading. This will help you navigate the markets, and how you can use insights carefully to your advantage. Of course, if you begin to make profits from trading, it can be all too easy to get ahead of yourself. Beware of falling into the trap of over-confidence in your investments.

Trading does have risks involved, and some will lose their investments altogether. Here, we’ve put together a list of the most important tips to remember when it comes to trading. These should help you when it comes to taking that first leap; so, take note!

• Put the effort into learning from the best. We aren’t born with an innate sense regarding how to sell and buy shares! Nor will you become a trading sensation overnight. Learning to trade takes time and effort, and you’re best off selecting the right mentors to show you the way. Consider learning with Trade Room Plus, where you can watch the pros as they trade live; and even have them do it for you. Educating yourself about the stock market is definitely the way forward. It’s not about luck.
  
• Don’t wait around to cut your losses, even from the beginning. Noticed your stocks in a certain company are persistently falling in value? They might continue to fall, causing you to lose increasing amounts of money.
  
• Keep track of high value stocks: do your research beforehand. Whether you own any shares in them yet or not, keeping an eye on the best stocks can be a great way to predict changes in the market. Of course, you’ll learn more about predicting and speculating as you take on the challenge to educate yourself about trading.

• Set rules before you start – and stick to them. The best investors have a set list of guidelines that they always follow. This helps to keep their investment strategy ahead of the game. For example, a trader might set a rule to sell when shares reach a certain point. This helps them maintain a steady, more predictable set of trading habits.
  
• Don’t become too emotionally invested. Often, where money is involved, emotions are too. It’s healthy to have some level of emotional investments tied into the financial investments you’ve made in stocks. After all, money is time! However, if you become too emotionally invested in trading, you can find yourself becoming increasingly drained from the entire process. Don’t get attached to particular shares. Don’t get the idea into your head that investing in a certain company will pay dividends after time. Your personal attachment for any company doesn’t have any control over the global markets!
  
• Keep an eye on debt markets. Don’t focus just on stock markets. Debts have a huge impact on the stock market. If people are in debt and actively losing money, they’re likely to sell shares in order to get out of the situation. Growing debt means the economy is slowing, and that people are therefore much less likely to want to invest in shares. When demand goes down, the value of stocks also falls.

• Don’t broaden your investments too much. If you’ve found a small set of investments that you’re happy with, don’t branch out too much. Instead, your efforts are best focused on a small number of stocks – you can watch the trends as they happen over time. This will help you make more insightful judgements. This simply isn’t a viable option when you’ve invested in hundreds of different companies.
  
• Look back on previous trades and whether your strategy worked. It’s common that traders will sell their shares for a profit, without taking the time to look back on the trends that led to the profits themselves. Investing more effort into your trading history, and analysing the statistics, can help you with future financial investments!
  
• Learn about currencies and international affairs. With forex trading, currencies mean everything. The value of a currency may fall drastically due to a particular event, for example. In keeping up to date with international affairs, you’re giving yourself the power of knowledge. This can help you navigate exactly when to buy and sell certain shares.

How do I Choose Which Trading Strategy to Use?

There are a variety of trading strategies you can choose from when learning how to trade. It will take time to get to grips with learning about each strategy – and whether it works for you. It’s worth familiarising yourself with each strategy before choosing which one you’ll start out with. Each professional trader will also likely have their own preferred method of choice. The method selected often comes down to experience and how they have worked (or how alternative methods haven’t worked) in the past.

Of course, you don’t have to stick to just one trading strategy. Some prefer to mix it up a little. But, once one method is found to be successful, many tend to stick to their tried and tested preferences. Here, we’ll outline the most popular trading strategies, and the level of risk involved in each.

• Buy and Hold
  Let us introduce you to one of the truly tried and tested stock trading strategies: the buy and hold method. A safer means of investment than the more volatile day trading strategies, buying and holding is likely to reduce the risks of losing money. The buy and hold strategy can be costly to begin with. It involves purchasing stocks from the most predictable, successful companies. These companies offer products and services that are often deemed essential or necessary, despite fluctuating markets.
  
  Buy and hold trading a much more passive technique than, for example, day trading. It can take a while to see profits, however the companies being invested in are very likely to make somewhat predictable profits over time. This is the go-to option for investors with minimal time on their hands, but who like to use strategies that yield results.

• Day Trading
  Exactly the opposite of buying and holding, day trading comes with a significant level of risk. This one is okay if you don’t mind losing money, especially to begin with. Over time, you might find yourself making profits within just 24 hours – a great motivator for those with little patience or an abundance of spare time.
  
  Day trading involves timing your day around the respective market you’re trading in. For example, the US stock market is open for trading between 9 PM – 1 AM GMT. If you’re trading in that particular market, you’ll wake up in the evening, ready for a “day” of continuous trading between those hours. You’ll purchase a variety of stocks once the market opens and monitor the value of those stocks as the hours tick by. Once you begin to see a profit, (remember the forex market is more volatile than traditional blue-chip stocks) you’ll sell those shares.
  
  Many claim to have found a lot of financial success through day trading, and it’s great for those who love the anticipation and thrill of the process. However, if you’re wary about potential losses, it’s best to stick with other methods.
  
• Momentum Trading
  This is where traders buy stocks that are increasing in value. They do so with the expectation that these shares have not yet reached their peak. So, they wait for them to reach a higher price point before selling. Once they’ve grown to learn more about stock trading, individuals can sometimes identify the ideal time to invest in stocks that are on the rise. It can be a risky strategy, though. Sometimes, the shares have already reached peak value, so the investor loses out.

The motto behind momentum trading is “buying high and selling higher” – however, this again, goes with the expectation that shares will increase further. Sometimes they simply depreciate, and you’re left with a loss. It’s all part of the risk! In learning more about stock market trading, you’ll gain an insight as to how the experts navigate their investments.

• Swing Trading
  Swing trading involves investing in stocks for a relatively short amount of time, after analysing certain changes within the market. The time period for swing trading can be anywhere from days to a couple of months. Swing trading involves careful predictions regarding where a particular market share is going to move next. It involves analysis, and a deeper understanding of how stock trading works.
  
  It tends to yield positive results (when it’s done correctly) within a relatively short time frame. However, this may have drawbacks. As traders are working on a short-term basis, they might miss out on the bigger picture and lose out on longer term opportunities.
  
• Penny Stock Trading
  Penny stocks usually trade for less than a pound. They are likely to be found on less popular exchange services, as their share price is much lower than those of substantially valued companies. These companies are just starting out, so their trading prices are much lower. As it goes, investing in a start-up company can be risky. However, the fees per share are less than £1. This means there’s not a huge amount of risk involved unless you invest on a huge scale.

As always, it’s best to take advice from the stock trading experts. Find a reputable source of information with years of experience in trading. This can sometimes be difficult to do, as there are so many resources out there. Each one of them are making grandiose promises to those just starting out. Instead of tackling the over-saturated market of trading advisors and educators… Why not look towards Trade Room Plus?

Trade Room Plus: The Best Way to Learn How to Trade

We hope this article has given you some insight as to how you can kickstart your trading education. If you’re looking for a reliable, trustworthy trading mentor with years of success under their belt; look no further than Trade Room Plus. As the UK trading experts in forex trading, their trading specialists have an abundance of various resources for you to put to good use. Without a doubt, they’re one of the best UK resources for learning how to trade.

Don’t waste time with overpriced tutors that are going to promise you dreams that simply aren’t attainable for beginners. Look at the realistic opportunities available to you as a trader. Learn how to trade from the very best. From Copy Trading to watching their Live Trade Room (you can get 14 days for free!) – you’ll be familiar with the trading process in no time.