Thinking of trading but still on the fence?
For many of us, stock trading can either be an exciting income opportunity or a frustration. The outcome largely depends on whether you have chosen the right broker or not. While there is no sure way to guarantee success, you can surely set yourself up for it by selecting an online trading platform that is in line with your aims, your thought-process and learnings.
The moment you click on a few ads related to trading, you will find that Google automatically starts throwing more trading ads at you. Think of it as the universe is trying to push you to take that step. But always remember to make a wise choice when choosing a platform. It is friendly.. Is it catered towards beginners.. Will it suit you since you are on a learning curve? Does it have resources to be able to learn from? You can find out all these things about the platform by visiting the company’s social media accounts as well.
If you are well-versed with trading for a few years now, you can check out the platform's blog to see if they think the same way you do, if they have information that can help you. Are they giving you a better deal.. So on and so forth.
If you are experienced then you might be looking out for more products and services that will enhance your already existing portfolio.
You may like to take a look at Trading account: Need and Benefits
Be honest with yourself and determine how far you have travelled in your trading journey. Are your goals short term or long term? Only your goals can determine which online trading platform to go for.
Set goals for yourself
If you haven't set your goals yet, this blog might help you right here and now. All you have to do is reflect on these questions.
Q1. Do you want to be an active investor or a passive one?
Some people want to be able to leave their day time job and just focus on investing. Some want to be active everyday. While some others wish to just be active once and then forget about the investment for years. It’s time you decided which way to go.
While there is no right or wrong way to trade, the risks and rewards are different for each type of trading:
Day traders buy and sell stocks throughout the day.
Day trading has the potential for quick returns.
Money is borrowed.
Stressful and risky approach.
In case trading is't profitable it could lead to huge debts.
A long term approach.
Can last from a day to a week.
Relatively quick rewards than day trading.
Lesser risk than day trading.
Labour intensive approach.
Buying and holding of stock for months or years.
Cost efficient compared to trading.
Lower risk compared to trading.
Understanding investing takes time.
This brings us to another question...
Q2. What kind of trade do you want to execute?
Some traders know what they want to do and just need a platform to facilitate trading. Some need a broker to help and a broad range of resources. Some look for marginal trading. Others look for fixed income securities. You can choose your online trading discount broker depending on how you want to go about trading.
Q3. Why do you want to trade or invest?
Are you looking at trading as a career option or do you want to fulfill a temporary goal. Maybe there is a specific expense you want to fund. Are you treating this as a secondary source of income or trying to build a retirement plan for yourself?
Again, there are no right or wrong answers. Be honest with yourself as you are the one who will need to invest time, money and energy into this.
The last thing I want to mention is, learn about trade before you start. Take a small class if you must. Just like any other skill, learn if you want to to perform well.
Your needs now will be different from your needs in the future. So when I said you have to decide now, I'm not asking you to predict your future. What I’m asking you to do is prepare for the present as per the situation you are in right now and take a step. This will put you in action and help you start. Many small steps will create momentum in your trading journey. If you are a beginner at trade this is one way you can think of going about it.
Hope this blog was helpful and you could take away some good pointers for yourself.
Remember - Anyone with a 'will to learn' can learn to trade.
Until next time!
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