There’s money in stock trading. Just ask Warren Buffett. If you’re interested to become like him or invest your money for a long-term high yield, go for stock trading with these tips in mind:
1. Learn as much as you can about stocks. If your idea about stocks is just that there’s New York Stock Exchange, then you definitely still need to learn a lot of things. Stock trading isn’t that difficult, but it can get confusing at first especially if you’re faced with numerous tools.
2. Choose your method of investment. There are actually different ways on how to invest in the stock market. The regular one is to hire a broker or use an online trading platform then open a bank account, which you can use to fund or withdraw your earnings. However, you can also create a stock trading account using your 401K or 403b plan. There are also banks that make stock trading so much more convenient for you.
3. Decide how much you want to invest. Usually registration is free, but that doesn’t mean you can already start trading. You still need to fund your account, and some platforms are just too expensive. If you’re a beginner and you want to be a bit cautious at first, then look for an online broker that lets you start trading at less than $100.
4. Learn to invest in blue-chip stocks. Once you get into stock trading, you’ll discover there are different types of them. You have common and preferred stocks; there are also blue-chip stocks (or blue chips). These are considered to be the best types of stocks since they are very stable, reliable, and profitable. The cost per share is surely very expensive, between hundreds to thousands of dollars, but if you want a high yield with the least possible stock risk, blue chips are worth it.
5. Diversify your stock portfolio. Don’t place all your eggs in one basket. After all, as mentioned, there are different types of stocks available, and they carry their own advantages. For instance, common stocks don’t give dividends, but they give you voting rights on the business. Preferred stocks don’t, but you can get guaranteed dividends.
6. Apply a stop-loss order. One of the most important strategies to keep in mind is the stop-loss order. It simply means you create a maximum and minimum ceiling when you trade. This insulates you from too much loss in case your stocks are not doing very well.
7. Select the best online broker. You can hire a professional broker who can trade on behalf of you. But if you are looking for flexibility, affordability, and control, then you should pick an online trading platform. It is normally web based, which means there’s no software to download. Some even have their mobile version, so you can trade conveniently on the road. Online brokers such as Ioption also permit you to trade in binary options, so you can skip the hassle of monitoring multiple accounts or software.
There are actually two ways on how to do your binary options trading. First, you can have a human online broker who is going to execute all your decisions and keeps track of your profits or losses. The second option is to use an Internet-based platform. For the past few years, the latter is more preferred since it allows traders to create contracts with more ease, quickness, and flexibility. After all, they can trade in binary options anytime they want.
There are a couple of online brokers that can help you in binary options, but only a number of them are worth considering. To find out the best online brokers among the lot, keep the following tips in mind:
It should be available 24/7. You will not expect yourself to be trading 24/7—that would be impossible, really—but a program that runs constantly means that you can trade whenever the market looks very favorable to you. It should have at least 99.9 percent up-time. A minute’s or worse an hour’s downtime could mean huge potential losses for you.
It must display different assets. Though binary options trading is really about contracts, these contracts are still based on assets or financial instruments such as stocks, bonds, and commodities. Some brokers focus on one or two. If you truly want to maximize your investments, you have to search for brokers that offer as many of these—or in fact all of them.
There are plenty of tools to use. Binary options trading is also about speculation. You determine whether by the time your contract expires it is either up or down. Nevertheless, you do not second-guess, or else you are doing something very dangerous. You create a credible, reliable hypothesis or decision. You can only do that if you have studied trends, among others.
It is therefore essential if the online trading platform already has some great tools for you to use. It tracks previous trends, saves your previous transactions, and provides real-time news updates. All these are helpful when doing technical and fundamental analyses.
You can choose your preferred expiry time. One of the biggest differences between the regular and binary options is that the latter has more choices when it comes to expiry dates. The best online brokers must also reflect this advantage. In other words, you can trade in binary options not only weekly, monthly, or quarterly, but, most importantly, hourly. Experts say that if you want to increase your yield easily and quickly, you should trade in binary options by the hour.
It should give you a specific payout percentage. The best online brokers tell you how much you can gain if you win. Normally, brokers have 67 to 90 percent payout, but why would you settle for such if you can actually get a 75 to 90 percent payout? To top it off, they do not leave you empty-handed should you be out in the money. They can give you 5 to 10 percent return for that.