Stock Trading: The Basics


Mrs. Smith was now sixty-years old and strangely, felt lonely! She wanted to do something worthwhile after retirement. “Something that keeps my mind occupied, where I don’t have to step out of the house, be answerable to clients and yet earn some extra cash!” she told Mary, her daughter.

Mary – an investment banker by profession, suggested that her mother enroll herself in a stock trading course and try her hand at it. Like Mrs. Smith, today, people of all ages – from students, housewives, retired veterans, to those who are employed but want to earn some extra income, are taking up stock trading! The fact that, stock trading can be done online and from any location, is easy to learn and requires minimum investment, has contributed to its growing popularity!

Advantages of Undertaking a Stock Trading Course

However, just like before doing a job, you need relevant knowledge and training, similarly, before trading in stocks, undergoing a stock trading course is advisable. Doing so prevents you from making hasty and unwise decisions in highly volatile markets conditions. The course also grooms you in the basics of stock trading and gives you a thorough understanding of how the stock market functions. It can successfully transform you, from a novice to a full time trader, who knows how to capitalize on the fluctuations in the market and minimize losses! Such a course, can also enable you to gain greater confidence in yourself and reduce your dependence on brokers, saving you time and money!

What Basic Concepts Can a Stock Trading Course Teach You?

Stock trading is easy to understand, once you can grasp the fundamental trading concepts, tools and varied stock trading methods and strategies. A stock trading course helps simplify these for you! Most courses start by cutting into investment jargon, and explaining their meanings. “Whether an individual chooses a traditional or non-traditional education to learn how the stock market works, the following basic subjects are covered: How the stock market stock exchange works; Live trading on various trading terminals; Risks Management which can be managed by learning Derivatives ( Futures contract and Option contract and Portfolio Management);  Money Management; Behavioral Finance; How to interpret financial or economic news and What to look for in a broker or brokerage firm. More advanced topics would include:Trading strategies; Fundamental analysis and Technical analysis,” Wikipedia informs.

Why a Stock Trading Course Is Better than a Seminar?

As we all know- ‘little knowledge is dangerous!’ So, “Can you really achieve ‘financial freedom’ by spending a few hours at a seminar on stock market investing?” David Robinsonasks in an article, published in The Guardian. Speaking about the latest trend of stock market seminars being held in hotels for would- be investors, he declares:  “What did the seminars tell me? That investing for the long term, buying low and selling high in the style of Warren Buffet, is old hat. Instead, I should jump into the world of “spread betting”, going “long” and going “short”, with mini-bursts of activity based on the zigzag of chart patterns. This, I was told, is the “recession proof” way to make money.”  Though he admits that, “…as an out-and-out beginner in the world of investment, I admit I have learnt a few things. I have begun trading, albeit with just £500…,” Robinson is clearly not a fan of stock trading seminars.  Which is why, many stock market gurus, advocate enrolling for a high quality stock trading course- that teaches you the basics of stock trading in a more sequential, detailed, structured and thorough manner, than seminars on the subject can!

Add Other Learning Resources to Your Stock Trading Course for Greater Benefits

Irrespective, of how good your stock trading course is – experts advise using alternative off-line and online resources of learning, to increase your grasp over the stock trading basics. Keeping yourself updated on news about the stock market and about companies you are keen to invest in, is important. Simultaneously, reading books on ‘how to invest’ in the stock market and reading up on tips by ‘star stock market investors,’ like Warren Buffet helps as well! In his annual letter to ‘Berkshire Hathaway’ shareholders, Buffet, who is recognized as the world’s greatest stock investor, spelled out his basic tips for new investors. Brett Arends from The Wall Street Journal recorded these as being: ‘Staying liquid or always having enough cash to invest; not buying, when everyone else was; making wise investment choices by investing in the value of the company and what it earned; avoiding businesses whose value could not be evaluated and understanding what you own.’

This article was written by Phil Steel, an experienced researcher and writer on finance and trading. He advocates taking a stock trading course before investing.
Image source: SmartPhotoStock

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