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Have you always dreamed of being your own boss and securing total financial independence? If so, you have probably thought about trading stocks as an option. Below are four answers to the most common questions that new traders like to ask.
How Much Money Do I Need To Buy Stocks?
This is like asking how long is a piece of string? Lots of people are under the impression that they need a significant war chest before they can enter the world of trading stocks and shares. Sure, if you are looking to buy a stake in Apple or Facebook, that’s going to set you back a pretty penny. However, there are also innumerable stocks and shares out there that can be purchased for next to nothing. In fact, there are some stocks that are known as penny stocks, because, well, they cost just a single penny to purchase a share.
Of course, the more money that you have when you begin trading, the more options you will be able to consider. But it is possible to invest in stocks and shares today with only a modest amount of capital available to you.
Do I Need Any Prior Knowledge Or Training To Trade In Stocks?
We should preface this section by telling you that the more you know before you begin investing, the better. In fact, we would go as far as to actively discourage anyone with absolutely zero experience from diving straight into the world of stocks and shares trading.
However, thanks to the rise of automated trading platforms and other similar innovations, it is now technically possible to begin buying and selling stocks without any prior knowledge of how it all works.
The most obvious problem with this approach is that the lack of knowledge means that you will be ill-prepared for responding to unexpected occurrences. The more you know, the more versatile you will be and the easier you will find it to adapt to the unexpected.
Can I Make This My Main Job?
Yes, you absolutely can. It won’t be an easy undertaking by any means, if you want to turn your investing hobby into an actual bonafide source of income, you are going to have to be prepared to work with the appropriate levels of funding. However, if you are asking “is trading options a reliable source of income?” then the answer will depend on you as an investor.
If you are only willing to put down small amounts of money in order to buy stocks, you are only going to be able to sell relatively small amounts. Unless you happen to strike gold and are able to turn a meager investment into a substantial return, it’s going to be difficult to make a living wage without being able to invest a reasonable amount of money.
However, if you have access to the necessary resources and you know what you are doing, you can definitely turn your investing into your main job.
How Do I Choose Which Stocks To Buy?
Unfortunately, there is no simple answer to this question. We would all love it if there were some clear and simple criteria that we could all use to instantly assess whether a stock or share is worth investing in. However, the reality is that the dynamics that underpin the value of stocks and shares are so complex and so affected by such a wide range of factors that it is impossible to devise a single set of criteria that everyone can follow all the time.
At the end of the day, it is going to take actual first-hand experience to teach you which investment options are worth pursuing and which are best left alone. If you are just starting out, then you can use social and mirror trading platforms in order to replicate the moves of more experienced traders. This can provide you with some useful insight into what sort of stocks they consider worth buying.
If you know what you are doing, you can turn trading stocks into a full-time profession. It won’t be easy, but if you are willing to do the leg work then it is possible. Keep the advice above in mind as you proceed.