If you have decided that you want to try to make some money by trading your own stocks without the assistance of a stockbroker, then you will be happy to know there are many things you can do to help protect your investment. Rather than signing up for an account online and trading on a whim, first, you should learn some basic information about how to successfully trade your own stocks.
To help you be successful, here are some time-tested tips for personal stock trading as a beginner:
Tip: Use a Buy and Hold Strategy Rather than Day Trading
Many brilliant people have tried to make their fortunes by day trading and timing the market, and most of those people have failed miserably. Historically, those who have made the most money in the stock market have done so by purchasing stocks at a low price and holding them long-term until they have gained in value and can be sold for a profit. When you are new to stock trading, this should be your strategy. Buy the stocks you plan to hold onto for the longer term and avoid trying to time the market or trading too often.
Tip: Avoid the Natural Tendency to Buy or Sell Stocks Based Purely on Emotion
While it makes sense for you to invest in companies that you believe in and that you feel will be profitable based on your research, you should avoid the natural tendency to sell and buy stocks solely on how you are feeling.
For example, if the stock market drops drastically one day and you are fearful it will continue to drop, you should avoid the emotional decision to sell off all of your stocks as soon as the market opens the next day. When you are buying and selling your own stocks, you need to be able to ignore short-term market fluctuations or you will sell out of fear and lose money.
Tip: Find and Use Reliable Sources for Your Stock Purchasing Research
Finally, when you are looking for companies to invest in by purchasing their stock, you need to rely on reputable sources for research. You must research companies that you are considering and then make an educated guess about the future value of the company's stock. You can find reliable sources of investing information via the internet, investing magazines, and through member forums where other self-investors gather online.