Here are 10 ways to teach yourself stock trading as a new investor

If you are a new investor and taking your first step towards learning the basics of stock trading, then you should have access to multiple resources of quality education. It’s akin to riding a bike, with trial and error that is coupled with the ability to keep going which will eventually lead you to success.

One biggest advantage of online stock trading lies in the fact that this game lasts for a lifetime. Investors will have years to develop and hone their skills. The strategies that were used around decades ago might still be relevant and utilized even today — and with the advent of online financial trading courses, it’s easy to get into it.

So for newbie investors who plan to take their first steps, here are 10 great answers to the simple question, “How do I even get started?”

1. Open a stockbroker account

First things first, find a good online stock broker and then open an account. Get familiarized with the overall layout and take advantage of the freely available trading tools and studies that are offered to clients only. Some brokers even offer virtual trading which is greatly beneficial because you can trade with virtual simulators (See point #9 below).

2. Read books on financial trading

Books provide in-depth information and are inexpensive compared to the costs of these kinds of classes, seminars, and the educational DVDs that are sold online.

3. Read articles

Articles are the greatest resource for online education and upgrading one’s knowledge and skills with respect to online financial trading courses and online financial education courses. Some of the go-to websites for in the areas of investment, financial trading, financial education are investopedia.com and of course Google.

4. Find your mentor

A mentor or a stock trading trainer could be anyone; a family member or a friend or professor, co-worker basically any individual who has a fundamental understanding of how the stock market works. A good mentor will be eager to answer questions, provide help when needed, recommend valuable resources, and keep your spirits up when the market gets rough. All successful investors will have had some stock trading trainers during their initial days.

5. Study about the great investors

When you learn about the greatest investors, it will give you a sense of purpose, provide inspiration, and also make you appreciate your own endeavours in the stock market. The legendary investors include Warren Buffett, George Soros, Jesse Livermore, Peter Lynch, John Templeton, Benjamin Graham and Paul Tudor Jones, among many others. We even recommend the book series Market Wizards by Jack Schwager which will provide fresh perspectives in this field. You can even have some of these legends as stock trading trainers, by reading the books they’ve written and the advice they’ve given on investing.

6. Understand and chase the market

Another great resource for new investors is news sites such as Google Finance and Yahoo finance. If you need an in-depth understanding and coverage, then explore the Wall Street Journal and Bloomberg. When you monitor the markets each and every day and read headlines; you can expose yourself to trends, analysis, concepts and an overall understanding of the general business. You can even follow the markets on TV by watching CNBC, Bloomberg which is the most popular channel related to this topic. It will also broaden your knowledge base once you get hooked onto it.

7. Explore paid subscriptions

When you are paying for research and analysis, it can be both informational and useful. Some investors may find that by merely watching or observing certain market professionals, it will be more beneficial to them than applying for new lessons themselves. There are a lot of paid financial trading courses available online; the key is to find the right one that fits your goals and objectives.

VERY IMPORTANT — Be very careful. There are many financial trading courses that come from independent traders and services. These ones claim that they have fantastic returns and they can “teach” you how to be successful. Be aware that 99% of them are just a scam and they come with prices ranging from $99 — $149 per month, or even more.

8. Attend seminars and take classes

Most seminars will provide valuable insights into the overall market and specific investments. And they will focus on one core aspect of the market and how the speaker has found his/ her success by utilizing their own strategies over the years into the field. Not all seminars will have to be paid for. Some seminars are provided for free and these prove to be a beneficial experience, just be wary of the sales pitch that will almost always be expected at the end of the session.

When it comes to the classes, these are usually quite pricey, but like seminars, trading classes can also be beneficial.

VERY IMPORTANT — Similar to paid subscriptions, be careful of classes and courses that incur a cost. Most of them are easily above $1,000 and they are sold with fake promises to acquire valuable knowledge and information. Their fantastic sales pitch will literally suck you in, take your money, and excite you during the course. It will then leave you with a prospect that wasn’t even profitable enough to begin with.

9. Practice online trading through a simulator or Buy your first stock

Once your online broker account is set up, the best way to get your experience in online trading started up is to simply take the plunge and start your first trade. Never be afraid to start small, even with 1, 10, or 20 shares as it will serve the purpose of getting you into the game.

If in case, you are not able to trade with real capital initially, try using the stock simulator for virtual trading. There are a variety of online brokers who offer virtual trading options for practising.

One of the most common mistakes online traders make is to go all-in and try to make it big with a full range of portfolio position out of the gate. This is a painful mistake and reason why many novice investors suffer early on with big losses. Having a proper portfolio allocation is very crucial for Investment Success.

10. Passive Index, follow Warren Buffett

For most people, online trading might be a losing proposition. Warren Buffett, the greatest investor of all time, recommends that individual investors to simply follow passive index instead of trying to beat the market trading on their own.