How to Place Your First Successful Trade on the Stock Market

Whether you have a little or a lot of background with trading, you need to stay on top of every detail factoring into a trade decision. For beginners, it might be helpful to know what you’ll be up against. As for veterans, you can’t ever lose from revisiting the fundamental elements.

Steps

1. Choose your investment size, and what you are willing to lose and hope to make. If you realize you’re not going to be able to handle losing any money, don’t invest. Consider your needs and/or desires as far as income. Be realistic.
2. Choose your stock or option. The most profit in the market is made from volatility, so you may want to work with a stock that has moved or is on the move. Verify with any technical indicators you can find.
3. Identify the action you expect the stock to make and why it will do so. Charting, news, and market trends can often tell you where a price is going.
4. Decide where you will stop if you make money and where you will stop if you are losing. The market won’t go up forever, so have a plan for taking your money and leaving. In the event that you made a bad pick, then know how sour the trade has to turn before you see that things aren’t coming back and you have to bail out.
5. Contact a broker and implement the strategy. Online brokers and telephone brokers are just fine. Be careful about commission costs.

Tips

• Don’t value any one factor too much when looking at the reasoning behind a trade decision. If some factors indicate a certain stock reaction, but others contradict, do not ignore the contradictions. Having the most confidence is equally as important as having the least doubt.

Warnings

• Even an educated decision can lose money in the market! Don’t ever underestimate the consequences of putting capital at risk.

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