If you’ve never traded stocks, you might feel a little timid about jumping into the market. Fortunately, you can learn stock market trading fundamentals by paying close attention to a few basic tips while you trade.
Don’t Go All In
The stock market isn’t Vegas, but they do share one rule, and that is to never go all in. You may have the surest pick in the market, but you should never put all of your eggs in one basket. As a new investor, you have to develop your trading skills and instincts. Until you do so, you should be very conservative in your trades.
Don’t Sell in a Panic
You might wake up one morning to see that one of your stocks has dropped a few percentage points or more. Don’t panic and sell everything. Do a little research first as to why this could have happened. After some digging, then you can make a more informed decision.
Take Profits and Sell High
No one ever went broke by taking profits. Unless you are strictly a long-term investor, you should regularly harvest some winnings, especially if you’re new to the market. Stocks can rise and fall at the drop of a dime. So when you’re up, take some of the profits and reinvest them if or when that same stock drops.
When you buy a stock, you don’t want to do so when it’s at all-time highs. There are exceptions to this rule; however, as a beginner, you want to buy a stock when its price is low. Many factors can cause a company’s stock price to slip. If the company is strong and healthy, then the dip should only be temporary, making it a good time to pick up some shares.