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A Guide on Investing in Stocks

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Most people wonder how to start investing in stocks and be successful at it as well. Investing in stocks involves putting your money in an online account for a set period and then withdrawing it plus the profit. Stock markets are the best place to start as a beginner to gain investment experience. Once you learn how to get into stocks you’re set to go.
How to start investing in stocks

1. Understand why you want to start investing in stocks

As an investor establishing your goals on the saving plan will help you make decisions in the subsequent steps.

If you’re looking for a long-term investment, then stocks are the way to go. Withdrawing your money after a short period comes with a significant risk of losing your money.

2. Determine the kind of investor you want to be

Establishing the kind of investor, you’re from the word go will help you wisely choose the type of investment you want. The following are the types of investors and what is required of them:

• Use a financial advisor

These investors employ financial advisors’ services to help them determine the best investment strategies to use.

• DIY

Investors do research on their own on companies and stock markets to determine the best deals and where to invest.

• Passive investors

Investors who find it hard to do the stock research on their own usually decide to use a robo advisor.

3. Decide whether you want passive investing or active investing

• Passive stock investing

This involves investing with a robo advisor, which is commonly used by people who prefer a more hands-off way. The Robo advisor does everything on behalf of the investor, including choosing individual stocks.

• Active stock investing

Here the investor is more involved, and this is the best type of investment for people interested in following stock market trends and reports.

4. Take it slow and let your money grow

Make this process gradual and invest more as you gain experience.
How to buy stocks

The following steps will help you buy your first stocks without much struggle:

i. Open an online brokerage account

Opening an online brokerage account takes a few minutes, and it’s a stepwise guided process.

ii. Determine the stocks you want to buy

Since it’s your first time, start small. The easiest way to go about this is to research companies you already know. Then use the information and analytic tools to determine if the business is available on your broker website.

iii. Decide how many shares to buy

The main tip is to start small. This will help you experiment without risking huge amounts. You can advance with time after you have gained experience.

iv. Choose your stock order type

You can choose from the following possible options:

• Market order- allows you to buy/ sell your stock immediately.

• Limit order- this can fall into either buy or sell limit categories.

• Stop order- this specifies the stop price at which you want to buy or sell a stock.
How to read stock chart

Reading stock chart is a crucial skill in stock investing, and it influences your success.

• Observe the price and time axes

The bottom axis shows the period for the stock chart. Whereas the vertical one shows the price. These two axes are used to plot trend lines that are very helpful in determining the price of the stock over time.

• Look for the trend line

Evaluate the trend line using various chart styles such as bar, mountain, traditional line, and candlestick.

• Identify trading volume

The volume is usually indicated at the bottom of the chart either by red or green bars. You should be on the lookout to examine the trading volume as they indicate the strength of a trend.

• Identify lines of support and resistance

The support lines indicate the price the stock doesn’t drop beneath. While the resistance line shows the price, the stock can’t be above. Evaluating these two lines will help you invest successfully.
Conclusion

The main two rules of investing are starting early and keeping your money invested for an extended period to grow it better. Once you understand how to get into stocks, how to buy stocks, and how to read stock chart you’re set to go. Remember investing is a journey, and you’ll learn as you continue experimenting and investing.

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