Trading on the stock market is one of the most popular investment options for both new and experienced traders. In order to know how to trade in stock market conditions, it is essential that you first understand that buying a stock or share in a company makes you a part-owner in that business.
Shareholders benefit from dividends as well as profits from selling stock that has risen in value but can also make losses if shares drop in price and they sell them. Here we explain how to trade on the stock market.
How to Become a Stock Trader
With enough starting capital, time and trading platform or broker, anyone can become a stock trader. Before working out how to become a stock trader, you must decide how much time you will dedicate to trading and what levels of risk you are willing to take. If you intend to begin trading stocks part-time, to make money alongside a full-time job, then using a stockbroker could be best.
Most provide a range of services tailored to different levels of involvement. Discretionary services give them full control over buying and selling shares on your behalf, advisory options allow them to provide insights and make trades with permission, while execution-only services are simply where the broker makes trades for you under your instructions.
How to Trade Stocks Online
Alternatively, if you want to buy and sell stock yourself, then this can be done with one of the quality online trading platforms here at Sharp Trader. As stock prices are constantly changing, there are a few main ways to buy and sell stocks and shares online:
- Market Orders
Trades are made almost instantly, buying shares at the current price or selling at the best possible one.
- Limit Orders
A price is agreed for buying or selling stock, with the trade only executed when that price is met. If the stock falls further or goes higher then only some of the shares may be traded. This can be instructed to a broker or set up with a trading platform.
- Stop Market Orders
An order is executed immediately when an agreed price is met for either selling or buying stock. All of the agreed number of shares will be bought or sold immediately.
- Stop Limit Orders
These are customizable trades, where an activation price is set and when that value is hit it turns into a limit order, meaning a set limit of the stock is bought or sold.
Use an Online Trading Platform
The essential principle of how to trade stocks online is still buying low and selling high. Using an online platform, you can buy and sell all sorts of stocks. Sign up for a demo account to see if what you know about how to trade on the stock market will be successful and practise trading before buying and selling stock with your own finances. Then use an online trading platforms to become a stock trader for real.