Who Needs a Stock Trading Tip?

By: Anne Durrell

The simple answer to the question is the title: You do. That's right, I don't even know you and yet I know that you could use a stock trading tip. How do I know? Simple, the market is so complicated that no one can ever know everything there is to know about it, so we all need tips. The other reason is that buying and selling stocks can be an emotional activity and your emotions can cost you a lot of money when they override common sense. So, even those of us with plenty of experience in the market could use some tips now and then to help remind us of the fundamentals.

The number one stock trading tip that I can give you is to choose a good online broker. There are plenty of options out there and if you choose a reputable company you can be sure that your personal information and your money are safe (at least from theft, no one is safe from the market). Be sure to research the fees charged by each of the brokers. They can charge a fee for each trade, as well as fees for having less than a minimum balance invested and fees for opening and closing an account. Especially for a small time investor, these fees can take a huge chunk out of your potential profits.

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Even more important than the fees is to check out the information and research section of the brokers website. Since you are doing your own investing instead of going to a traditional broker, you will be on your own to research the companies that you are interested in. Make sure the site is easy to use and understand and can provide you with the information you need to make intelligent investments. I cannot overstate the importance of this stock trading tip.

The next stock trading tip is to start small. There is always a learning curve when you start out and it is a lot less painful to take your lumps on some inexpensive stocks than to lose big right from the start. Although the big loss is sure to teach you a valuable lesson for the future, if you have anything left to invest that is!

Along the same lines is the next stock trading tip – don't put all your eggs in one basket. Make small investments and spread them around. If you like what a company is doing, you can buy more later, but you will learn more and have more fun if you buy a small number of shares in a large number of companies. The other major benefit to this strategy is that if one stock really tanks, you have not lost everything as the others will balance it out. And don't kid yourself, this will happen to you. Even professional brokers who spent all their time analyzing stocks occasionally pick a loser, so it should not come as a surprise that doing it part time you will be even more likely to make some wrong choices.

Stock Trading Tip

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Who Needs a Stock Trading Tip?

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