What I'm going to discuss here is not actually the Stock Trading 101. I'm basically sharing what I've done and how I did to learn and become a stock trader. I won't give you the specifics because I believe that I myself has still more to learn. As I've mentioned, I'm not a finance major. I as well don't have any experience working as a trader. It's just pure interest, merely for personal finance. For those who are just starting to do stock trading, I'm only ahead of you a bit I guess. Don't underestimate yourselves. We are now in the age of internet where there is an ease to access various information. The probability of success in self studying is very high. It's indeed a matter of determination, strategy and patience.
Okay, let's begin..First, I suggest you watch a Wall Street movie for you to get what's really going on in a market. Well in my case, I watched "The Wolf of Wall Street" starring Leonardo DiCaprio. You will appreciate the movie even though you're not a professional in stock market.
Second, make time to familiarize yourself to "trader-speak" words or terms. Just like any other fields of study such as medicine, accountancy, law, etc., finance, particularly stock trading or equities investment has a lot of jargon. For neophytes, reading business news relative to stock market will make your nose bleed. So, it depends on what you think is effective to you. It's either you start reading Investopedia website or (in my case) reading business news or periodicals about Philippine stocks or the Philippine Stock Exchange (PSE) and then "googled" the words or terms you are not familiar with. I remember when I first tried to read one, I actually finished reading one article without understanding any of it.
There are so many terms to look into, e.g., bull and bear, short or long, rally, uptrend, correction, IPO, spread and many more. Make it a habit to read at least two related articles in a periodical every morning. Not only you get to familiarize with the stock trading terms but also you get to know what is really happening in the market. Why do you need to know what's happening? Because there are different factors affecting stock price behavior, e.g., fundamental, technical, macroeconomics, environmental, investors' sentiment, etc. And as a trader, you are expecting to gain from short term fluctuations in stock price. Btw, there is difference between trader or speculator and investor. The difference is the latter usually buy and hold the stocks until realized.
Third, visit the PSE website. Learn how the website will help you analyze or review the market and prospective companies or shares.
Fourth, open an online stock trading account. I'm not implying that you do stock trading immediately with knowledge gained only using the first to third ways I mentioned earlier. The reason for opening an account will get you again familiarized how trading works, e.g., how price moves (live), the use of bid and offer price, buying using board lots, etc. I suggest you buy just one minimum (board lot) blue chip stocks. Well for me, learning through practical experience is more efficient than theoretical. No one will learn how to swim unless he/she is in the water.
Btw, there is a list of trading participants, i.e., online brokers in PSE website for you to choose from. One example is the First Metro Securities Brokerage Corporation (FMSBC). Just click the FAQS shown in the Home welcome page of their website. There shows how to open the account, how you will fund your account, how to place an order, etc. It's user friendly and for clients with MetrobankDirect account, opening an online trading account is FREE. So if you're not a client yet, you only need P2,000 (minimum amount to open an ATM savings account) and an extra amount to fund your stock trading account (amount you need to buy at least one company's minimum shares). Now, who says that stock trading is only for rich people?
In addition, FMSBC conducts free seminars re stock market basics, introduction to fundamental analysis, and introduction to technical analysis. Just call or email them for reservations. Details are found in their website as well.
Fifth, become thirsty of knowledge. Take advantage of other available resources such as books including eBooks. Make use of social media such as YouTube videos re tutorials and interviews of some of the best traders, etc. I recommend as well listening to Podcasts, e.g., Chat with Traders, join Traders or Stock Forum, e.g., Finance Manila and follow Twitter accounts or Facebook pages about stock trading/investing.Lastly, always visit my site for more updates. :-)
"Self-study, in a sense of learning by yourself without anybody teaching you anything, has an enormous value."--Robert Kraft#NotetoSelf #quote #QOTD #QuoteoftheDay
Can I just say what a relief to find somebody who truly knows what they’re speaking about on the internet? You, without a doubt, know the best way to deliver a problem to light and make it important. More people must read this and perceive this side of the story. I’ve just got a new way to see things differently from your insights. Thank you for sharing! I would love to see more updates from you.
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