Investing

Learning The Basics of Stock Trading: Best Sources and Options to Consider

Learning Stock Trading

Learning stock trading can help you to boost your wealth like nothing else. Wondering how?

That’s what this article is about. Stick around to learn how to trade stocks. 

Why do you need to learn to trade stocks in detail?

Learning stock trading might be daunting in the initial phase. You must master the complex strategies, tools, and platforms used in stock trading. Moreover, many new traders learning how to trade stocks need help to achieve their real potential. 

However, a good thing is that you can quickly learn stock trading with an in-depth understanding of the market. Adam Hayes from Investopedia says- you need the right mindset and approach for Learning stock trading too. 

Here, I will suggest some fundamental books for learning stock trading. You also need access to some tools to monitor performance daily. 

It is called technical analysis. I will also share some valuable tips. 

Must-Read Books for New Traders

Must-Read Books for New Traders

Michael Simmons from LinkedIn says, “Books Are Still the Best Way to Learn.” Therefore, I suggest some good beginner books for learning stock trading. 

Stock Market Wizards by Jack D. Schwager

Why read this book? It amalgamates strategies followed by the best traders. If you are thinking about how to learn to trade stocks, go through the in-depth interviews with experts from this book. 

Most new traders fish out while learning to trade stocks. They need help to fathom the complex domain of the financial market. 

Trading for a Living by Dr. Alexander Elder

This book is a complete guide for aspiring new traders. This book provides you with a complete course on stock trading. It covers:

  • The nuances of technical analysis
  • The right mindset for beginners in the stock market
  • Practical strategies that traders can directly use

Technical Analysis of the Financial Markets by John Murphy

To make quick profits from the market, you need to analyze the stock chart precisely. 

Technical analysis is the technique used to monitor stock charts. There is no better book than this to learn technical analysis. 

Before you start digging into the book, learn what technical analysis is. Read the article

“Technical analysis vs fundamental analysis: what’s the best way to analyze stocks?”

for clarity about technical analysis. 

Winning on Wall Street by Martin Zweig

This book takes you through the investing strategies that Martin Zweig personally followed. Are you still wondering how to learn stock trading?

Then this book is the best for you. Zweig’s informative and guiding approach will undoubtedly help you. 

The Nature of Risk by Justin Mamis

 The name of the book is self-explanatory. The stock market is never free of risk. You’re always at risk whether you’re a pro or a newbie to learning to trade stocks. 

In his book, Mamis said,

“The risk can never be cured by knowing enough.”

So, it would help if you also learned the risk aversion techniques in the book. 

Following the Market Daily

Following the Market Daily

Most experts say that if you want to be a champion trader, be a market nerd. But why do you need market knowledge?

It’s simple. You must buy when the market rises. And then sell when you see it declining. But you must track the changes in the market, for that. 

You must learn market news and trends for three reasons:

  • Deciding if it’s a time for short-term or long-term investment
  • Reviewing your current assets and setting trading strategies
  • Ensuring you invest in stocks that will indeed perform

Resources Like Yahoo Finance, Google Finance, and The Wall Street Journal

 You already know why you need market knowledge to learn stock trading. But books are a source of theoretical and static knowledge. Who will give you the current market information? The equations change every second in the market. 

In this relation, learn how these three sources can help you:

SourcesBenefits
Yahoo FinanceProvides a holistic market viewAny real time stock quote is available Financial analysis of the markets and particular stocks by experts Shares knowledge of big-time investment opportunities
Google FinanceBest tool for tracking how your portfolio is performingLatest updated news and events related to the stocks that you boughtSetting watch lists to view later or check real time
The Wall Street JournalBiggest repertoire of financial news and news of significant stocks All active traders can read WSJ to learn how to interpret a business before investingLearning about the forces that influence investments and profits in the market

Basics of Technical Analysis

Basics of Technical Analysis

Technical analysis is a baby step in learning about stock trading. However, it’s the backbone of your investment decisions, too. But it’s not rocket science. 

You must study past prices. Then, tally the prices with volume data and predict how prices will move. 

Understanding Price Charts in Different Time Frames

There are some parameters of the fundamental price charts. While learning stock trading, remember these two parameters:

  • The Y axis on the chart denotes the price scale 
  • The X axis is the time scale

You can understand the variance in price surge or price slump from this cart. But experts say that you must also learn about the different price points. There are some static time points. 

1. “Open Price”

If I am anticipating the feasibility of investing in a stock for a quarter, look out for the open price. It is the price that opened trading for that period. 

2. “High Price”

It is the highest price of a stock within a given period.

3. “Low Price”

It denotes the minimum price of the stock recorded in that given period. 

Balancing Technical Analysis with Fundamental Analysis

Fundamental analysis is crucial to identifying suitable stocks for long-term investment. However, you analyze the firm’s performance in the recent past rather than the stock charts. 

However, the technical analysis only includes a detailed stock chart data study. 

However, the question is how to balance technical and fundamental analyses. 

The first step is to choose a more extended period for analysis. It may be weekly or monthly. 

After learning the overall trends in that period, tally the projections with asset performance. But how to do that?

Do a fundamental analysis of the assets separately/ Then compare the findings from both analyses. 

Importance Of Studying Company Spreadsheets

 What are company spreadsheets? 

Some standard spreadsheets released by a company are:

  • Asset information sheet
  • Sheet of purchases and sales 
  • Balance sheet
  • Investment sheet

You must do a detailed study of viable information on these sheets. It will give you a clear idea of the company’s organizational health. 

If you think the company will grow, invest in it. 

Practicing Trading

Practicing Trading

What are the common dos and don’ts in the trading market? Remember, you only started to learn about stock trading. So, make choices only after thinking. 

Benefits Of Paper Trading or Virtual Trading

Moore stated: 

“Try investing in the market without putting money in the market yet to just see how it works,”

If you also think it is a good way of learning stock trading, then paper trading is your game. 

Pick one stock that you like. Then, observe its performance for three months minimum. After that, you will know what would have happened if you invested in it. 

However, experts say that there are also some paper trading tools. 

These tools allow people to test their skills when they learn about stock trading. 

Analyzing Results and Identifying Flaws in Trading Strategies

The best way to analyze your result is to compare your result with another’s portfolio. But you both must start simultaneously with the same stock capital. 

However, experts say most beginners learning stock trading make common mistakes.

Firstly, they need to judge the evolving conditions in the market. Secondly, the National Bureau of Economic Research says that 67% of Americans still need diverse portfolios.

But it would help if you diversified your portfolio to avoid failures. 

Conclusion

I shared many tips, tricks, and resources on trading stock. However, you must follow only one golden rule while learning to trade in stock. 

Do a fundamental or technical analysis of stocks. Then, do some paper trading. After that, make your first real investment when you are ready. 

Learning and practicing will reduce your risks in the market. It will also help you to make more informed decisions. So, your chance of earning high will flourish. 

Just stick to continuous learning. 

After learning stock trading, the basics of trading are straightforward to you. So, I will now share some tips for setting better investment goals. 

Always be sure of what you want from the market. Get to know the risks involved in trading also. 

You must also set a time scale for trading. For instance, a stock giving high returns now might slump in the next quarter.  If you know your goals, risks, and time scale, you are well in control of your trading.

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Ankita Tripathy

Ankita Tripathy loves to write about food and the Hallyu Wave in particular. During her free time, she enjoys looking at the sky or reading books while sipping a cup of hot coffee. Her favourite niches are food, music, lifestyle, travel, and Korean Pop music and drama.

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GGP Share Price Forecast: Everything You Should Know

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What Is A Venture Capitalist

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Best Artificial Intelligence (AI) Stocks to Invest in US 

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Certainly, the small companies might suffer from dearth of data mines to groom their language models. They may lack the huge stock capital needed to run AI modules as well. Benefits of Partnering with Bigger Companies for Small AI Developers Search for big companies like Microsoft investing in emerging firms like OpenAI. These partnerships can be a silver lining for investors.   Small AI developers can source data pools, equipment support and other facilities from big tech firms. So, their chance of better ROI fares higher. The trust of investors also skyrockets, when big companies invest or vouch for small disruptive Ai companies. How to Invest in AI Stocks? Wait, do you have the basic knowledge of investing? And you want to start your inning with AI stocks? You’ve landed at the right place. Let me tell you how you can quickly get started. Opening a Brokerage Account You can easily open a brokerage account in just 15 minutes. Seems simple, right? 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Overview of AI ETFs AI ETFs are trading pools that track data from the market to invest in the best pool of ai stocks. AI Stock Indexes and ETFs that Track Them The AI ETFs can track a versatile range of ai stocks indices. Some of these are: Indxx Global Robotics & Artificial Intelligence Thematic Index Nasdaq CTA Artificial Intelligence & Robotics Index Caution When Selecting AI ETFs with AI in Their Name  They may not be the best ETFs of AI using companies. To diversify, some ETFs use AI powered trading mainly. So, be cautious and learn about the AI ETF properly, before you make an investing decision. Major Players in the AI Race We discussed the kind of ai stocks that can perform better. But we must also share our perspectives regarding the best tech giants that gave assured returns over time. Meta Platforms, Inc. as a Leading AI Company Why do I say so? That’s because Meta is investing in expanding the range of generative AI use. We are aware of the MetaVerse. All companies in this loop use a unique AI supercomputer. At present, Meta buys Ai chips from NVidia. But they will soon produce the chips to be used in Meta data centers. Consequently, Meta experienced exponential growth in stock value. The present share price of Meta is 478.22 USD.   Meta's AI Investments and Performance We can see innovation and grit in Meta’s recent AI investments and current stock performance too. As a result, most brokers place their bets blindly on this ai stocks. Wedgewood Partners' Perspective on Meta Platforms Wedgewood Partners released their 2023 newsletter for Q4. The newsletter features Meta Platforms Inc. According to Yahoo Finance, Meta’s stock value grew 173.99% in a period of 52 weeks (about 12 months). In line with the same, Wedgewood quoted that: “The Company has been a consistent beneficiary of artificial intelligence (AI) over the past several years, investing aggressively in deep learning recommendation systems that help power its products, which reach nearly half the population of the planet.” AI Stocks That Will Skyrocket We almost decoded the hype around ai stocks. After that, it’s time to list some stocks that will see exponential growth or may be growing enormously already. Methodology for Selecting AI Stocks You must consider some vital touchpoints, to select the most suitable AI stock. These are: Current market position and the competitive benefit of the AI stock Revenue growth in recent time and current financial health Product portfolio Existing partnerships Risk diversification Market demand Popularity among the customer base Top 10 AI Stocks to Consider for Investment I used the above-stated parameters to make a list of the 10 best AI stocks: NVDA Amazon Alphabet Microsoft Palantir Meta Inc AMD (NasDaq) GOOGL (NasDaq) IBM ADBE (NasDaq) Detailed Analysis of GSI Technology, Inc. And Super Micro Computer, Inc. As Potential AI Stocks  These two stocks have high growth potential. Stocks like Alphabet or Meta might demand high appreciation value. But these two stocks have an assured chance of growth. It’s important you learn why you can buy GSI stock. Well, GSI witnessed a price surge of 168% in 12 months. At the same time, the price soared 104% in the last quarter. However, GSI is suitable for short-term investments only. In the long term, GSI shows much volatility. Moreover, GSI’s value plummeted 30% in the last 3 years. Upon fundamental analysis, Super Micro Computer seems to be undervalued. The company sells data center systems. So, they are the helm of the AI businesses. The current valuation of Super Micro Computer is USD 11.82 billion. The exponential growth continued since 2022. At the same time, there has been 2000% growth in the stock over three years. Conclusion Research shows that there are no big catches for those who are willing to invest in ai stocks. However, you must get your research right and place the right bets. For instance, you must be careful when choosing individual AI stocks over AI ETFs. In the short term, many ai stocks will fare better. But you need to do a detailed fundamental analysis to create a list of prospective ai stocks. Hence, there is a level playing field for experienced players and newcomers too. Explore the ai stocks and invest wisely. For More Business Related Articles By Click Below!! 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