From Novice to Knowledgeable: Practical Online Trading Strategies for Beginners - The Malvern Observer

From Novice to Knowledgeable: Practical Online Trading Strategies for Beginners

Malvern Editorial 17th May, 2024   0

Thinking about getting into the world of trading stocks but not sure where to start?

Taking the first step into the world of trading and investing in the stock market can seem like a daunting endeavour, but it doesn’t have to be!

Take a look at this handy article perfectly suited for beginners who are unsure where to start in their trading careers.

What is the stock market?

So first things first, what exactly is the stock market? The stock market is a place where investors can buy, sell, and exchange stocks. Stocks represent a share of ownership of a company which is open to the public. This means that stockholders are partial owners of the company, along with anyone else who owns a share of the company.




The stock market works through a series of exchanges, and stock prices and movements are monitored and shared so potential investors can identify which stocks they would like to invest in and buy or sell accordingly. Prices of stocks are calculated by computer algorithms, and historically trading took place in physical marketplaces, but now many people choose to trade through online trading platforms such as Tradu.

The basics of trading


So now you know the basics of the stock market, it’s time to get to grips with what trading means. Trading refers to speculating on the price movements of stocks and shares without actually taking ownership of them, intending to make profits by speculating whether a stock price will rise or fall. There are many financial markets you can choose to trade with, including forex, bonds, stocks, commodities, and indices.

There are many different ways to trade, each having its benefits depending on what works best for you and your financial goals. Below are three of the most popular trading strategies commonly used by beginners:

Trend

Trend trading refers to traders who try to make a profit by analysing the direction an asset’s price is moving and buying or selling depending on the direction the asset’s price is moving. If the price is moving upwards, traders would buy, whereas if the asset’s value appears to be going down, traders would choose to sell based on this trend.

Swing

In contrast to trend trading, swing trading sees traders seek out potential profits by investing in both the up and down movements of an asset’s price. As prices rarely follow one trend of going up or down, swing trading allows you to make money no matter which way the stock price moves, and closely analysing trends brings with it the opportunity to buy or sell when you predict the stock price will move.

Scalping

This trading strategy is all about making lots of small profits from small price changes over a short period of time. Scalping requires traders to closely monitor the markets and make quick decisions across a portfolio featuring multiple stocks in order to make a larger profit.

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