To get started in stock trading you need some money, a suitable broker, a coherent stock trading strategy and some basic knowledge. The most important information we have summarized for you in ten tips: With the compressed stock trading instructions you will not immediately a second Warren buffet, but guaranteed the jump on the floor.
The entry: You need this for active stock trading
To get started in stock trading, a securities account with a broker is required. The securities are kept safe for you in the custody account. The broker allows you – usually by means of online and telephone orders – to place buy and sell orders, which are then forwarded by the broker to the stock exchange. At least you can only place buy orders if there is enough liquidity on the clearing account.
Broker comparison: How to minimize the fees
The costs in stock trading are primarily composed of transaction costs and flat-rate custody account fees. With a broker comparison, you can minimize the fees: The price differences in the better known online brokers are not huge, but significant. You can easily compare at 10-Capital website. “The” cheapest broker does not exist: which depot is suitable depends on how many orders you give up in which order of magnitude on which stock exchange. Do not rely solely on comparison calculator: To be prepared for a qualified comparison, you should have an overview of the usual order fees.
Opportunities and risks in stock trading
Stock trading offers opportunities and risks. Unlike fixed-term or (safe) bond investments, no one can guarantee you how the investment will develop in the future. In good years, even the broad market as a whole can gain several hundred percent over a period of a few years. In bad years, 50-70 percent loss has already occurred. In the worst case threatens a total loss: Then listed a share at 0.00 € and is worth nothing.
Risk management: limit losses, run profits
Risk management serves to control losses in stock trading and minimize risks. The two most important instruments of risk management are diversification and loss limitation.
If your portfolio consists entirely or predominantly of stocks with a high correlation coefficient, there is no actual diversification: if a stock falls heavily for any reason, all stocks are very likely to be affected as well. So that dividing the portfolio into different stocks actually reduces risk, you should bet on stocks from different sectors, countries and regions.10-Capital review can help you out on this.
Margin trading: stock trading on credit
Many brokers grant their customers flexible credit lines, which are collateralized with the shares in the portfolio. The loans are referred to as a Lombard loan, securities loan or securities loan. Equity trading on credit enables disproportionate participation in price gains through leverage – on the other hand, losses on credit-financed equity transactions are also greater.
Stock Trading Strategy with Momentum, Gaps and Event Trading
It is worth knowing various strategies for stock trading and understanding their background or the reason for their proven success. Outstanding strategies include outbreak strategies, momentum strategies, and event-driven strategies.
Event trading seeks to benefit from price movements as a result of important economic or corporate news. To do this you take a look at an economic calendar and look for important dates, of which almost every week can be found several: orders in the industry, purchasing managers index, interest rate decision, etc.