Simple Ways to Learn About the Stock Market

Are you a new investor taking your first steps towards the world of stocks, bonds, and assets? You’re not the first person to be in this confusing position, and you certainly won’t be the last. Trading stocks is a great way to build wealth and expand your financial opportunities in the years ahead. However, it takes some time, and a lot of commitment to become the kind of person who wins big on their investments. The good news is that it’s never too late, or too early to start learning about the stock market. Thanks to the internet, there are now countless resources out there that can help you to figure out what stock trading is all about. Here are a few ways you can begin your education.

Stock Trading Course

Perhaps the easiest way to start learning about stocks and trading, is to take a class in it. A stock trading course will give you the fundamental introduction to everything you need to do know about trading. There are plenty of classes out there, and each is designed for investors at a certain stage of their trading journey. You can find courses for beginners, and even lessons for experts who want to hone their skills.

Simulated Trading

If you know the basics of stock trading, and you want to try your strategies out in a safe setting, then simulated stock trading could be the answer. Simulated trading allows you to use fake stocks or paper stocks to improve your knowledge of the marketplace and develop your understanding of the industry. Simulated trading can be great for beginners and trading pros alike.

Do Your Research

Another great way to learn about stock trading is to simply read up on the subject. There are plenty of books out there written by professionals who have spent years on Wall Street, getting to know the ins and outs of the financial market. If you don’t have time to read an entire book straight away, you can always check out some articles on major stock trading websites and educational pages instead. Influential figures in the stock trading industry even have their own social media pages and blogs that you can follow.

Find a Mentor

If you know someone who has experience trading stocks, or understands the financial markets better than you do, ask them to help you out when you’re getting started. While it’s best not to take the advice of a non-professional when it comes to figuring out how you should use your money, a personal mentor can give you some introductory guidance on where you can expand your education and develop your skills.

Speak to a Broker

Finally, what better way to learn about the stock market than to work with someone who spends their lives tracking the movements of the biggest stocks around? A broker not only helps you to determine where you should invest your money, they can also give you some insider tips into trading, so that you can eventually become more proficient at understanding the stocks yourself.

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Do Binaries Have a Reputation Problem?

Binaries can be a controversial topic for financial investors and traders. It is essentially a very simple financial instrument. You can speculate on whether a particular market will be a above or below a certain price at a specific time. The problem that some people and many governments see is that action as too close to gambling to be considered as a significant financial trade.

Some brokers have taken binary options and rebranded digital 100s. They are essentially the same product, but the stigma is lessened by calling them digital 100s. The rebrand may have been considered necessary by marketing folk, but it could be argued that the regulators have the wrong set of goggles on. These are legitimate financial transactions that can ease new traders into the markets without the overwhelming need to know every fundamental of every company.

Trading binary options, or digital 100s, is a way to take a short-term view of a particular market. When you are an active trader, this can be a way to act on your research and instincts without actually owning the underlying asset that you are speculating on. The mechanism is simple, which can be good for beginning active traders. But it can also be limiting. The losses and gains are capped.

With binary options, the maximum amount you can invest is $100. If you think that the oil stock index you have been watching will be above a certain amount by the late afternoon, you can put down up to $100. Your profits are going to be $100, minus whatever you put down if you are right. Your loss is just going to be whatever you put down. The risk is low, but the potential for the investment to have unlimited upside is not there.

When you get involved in financial markets, education is a necessity. There is no way to wing it as a beginning trader. Teaching yourself about trading and learning everything you can about binaries is the first step to deciding for yourself whether or not they have a reputation problem. Even though digital 100s are a simpler product, an overall knowledge of financial markets will help lessen the risk when you put down your money,

Risk management is absolutely essential no matter what industry you are in. To be able to make a profit if a privilege and it must be maintained by smart hedges and proper care of your risk profile. The longtime traders make it in this business by being smart and taking calculated risks, not by being reckless and risking everything. Risk is inherently part of trading and investing, but the downside must be managed, if you want to obtain the long-term upside.

Whether you are into the forex market, stock indices or commodities, digital 100s can be a way to speculate on these assets without actually owning stock or the underlying instrument. Many brokers offer both desktop and mobile trading, which makes it simple to get into binary options or digital 100s on the side of your current day job.

Even with the simplicity, you can find digital 100 strategies can be more complex. It helps to spread your money out over multiple digital 100 products so that you can have a combo of volatile positions and more stable positions. Just like any other trading strategy. Being able to read technical analysis charts is another skill that can help when you do down this road. Make sure that the platform or broker you are using offers a charting system that will allow you to exercise this option.

How You Can Invest Without a Lot of Money

Invest Without a lot of Money
You’ve done your research. You have picked the stocks and markets in which you want to place your money. You’ve even brushed up on the stock market lingo, but you don’t have thousands of dollars to drop. Good news, you don’t have to have thousands to invest.

Making your first investment is an exciting and terrifying task. However, many people are under the impression that, in order to invest, you need to have a lot of money. That is just not the case. In fact, many successful investors have started small and worked their way up. Here are a few ways to start your investing journey small:

Get a plan through your employer

Placing money into a mutual fund or 401(k) through your employer is a no-brainer. There is no minimum required investment for many of these plans. You will simply have it automatically placed into the 401(k) from your paycheck. Many employers also offer a matching contribution as well. Usually you have to stay with the company a certain number of years or have put a certain amount in the 401(k) to have the company match your contribution, however, it is definitely worth it. If you put $1,000 in, the company will put $1,000 in as well, giving you $2,000. Some companies offer a percentage match or up to a dollar amount as well (capping at $5,000, for instance).

Schwab Index Funds

Investing firm Charles Schwab offers five conventional stock-index mutual funds and three bond-index funds. Each of these has a $100 minimum. It has U.S. stock market fund options, international-index fund and bond-market funds. Any or all of the three would make for great portfolio holdings and none of them require a huge amount of money to get started.

Actively managed fund

Some investing firms will waive their regular minimum if you agree to making a recurring deposit. For instance, if you don’t have a lot of money to invest now (only $100), you would agree to have $50 withdrawn from your account monthly for a specific period of time.

Online Brokerages

Online brokerages have made it easy for many people to start investing. With as little as $500, you can open an account. Some online brokerages don’t require any minimum deposit. With these brokerage accounts, there are ways to pay no commission and buy/sell investments for very little money (about $10 is standard).

Acorns Investing

If you have never tried it, Acorns is an app through Intuit. It allows you to create a portfolio based on your investment goals. You can set up recurring deposits or you can start with a small amount (as little as $5). Acorns also allows for a “Round Up” investment. This means that every time you swipe your credit or debit card, the app rounds up and places the change in your investments account.

Any account with only $100 or $1,000 won’t do you much good. If you want to gather a decent amount of cash, you will have to save as much money as you can. When you have extra money, place it towards your investments.

Do you have any additional funds or investments that don’t require a high minimum? Let us know! We’d love to hear from you. 

Photo: Flickr: 401(K) 2012