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This Is The Basics Of Stock Trading That New Stock Traders Must Know

Even if there are traders who make a lot of profit with large capital, it doesn't mean that you are a beginner then pouring out large capital for stock trading. Minimize unexpected losses with small capital. Trading with small capital also helps you learn from trading mistakes. If you want to reduce your risks further, information is vital. That's why we recommend you visit premarket stock alerts to find more information before you start trading.

Every securities company now provides an online trading application for investors and traders. In this application, you can select, buy, and sell stocks. Besides, the online trading application provides facilities for analysis, stock screener, top summary, top broker, top stock, and many more. In stock trading, you can buy or sell at least 1 lot or 100 shares. The price per share along with the funds used affect the number of stock lots owned. Usually, securities companies provide tutorials on using the application. Study the tutorial to better understand the use of the trading application.

Not all of the stocks that are traded on the exchange are liquid. What are liquid stocks? Liquid stocks are stocks that are actively traded and easily exchanged for cash or cash funds. Buying liquid stocks can minimize the risks that occur when trading stocks. You can rush to sell when the stock price drops.

Look for stocks with high liquidity and a large market cap. The contents of the stock index can be checked on the official website of your country's stock exchange.

The share price is volatile. Sometimes the price goes down, sometimes the price goes up. In order not to panic, buy stocks when the conditions are buying on weakness.

What is buy on weakness? Buy on weakness is buying a stock when the price is low or at a point of support. If you have studied technical analysis, you must understand the term support.

Also, you can buy stocks when the conditions are buying on the breakout. What is a buy-on breakout? Buy on the breakout is buying a stock when the price breaks the resistance. You will also understand the term resistance when learning technical analysis.

Then, when is it time to sell shares? Sell ​​when you are in a sell-on-strength condition. What is sell on strength? Sell ​​on strength is selling a stock when the price reaches the resistance point. Sometimes stock prices can fall beyond expectations. When in this situation, cut loss becomes a selling option to avoid big losses. You can make a cut loss when the price falls to the point of support. Once the price breaks the support point, you can cut a partial loss. If the price falls through the second support point, cut losses completely to minimize losses.