It seems like there is a time in every intelligent person’s life when you stop and think: ‘hang on a minute…am I going to be a 9-7 wage worker for the rest of my life?’ Before anything else, you should know that you are already well ahead of the curve if you read this. Now, let’s see what exactly you can do to learn how to start trading stocks today. In this short guide, we will cut right to the chase: what is the quickest way to trade stocks?
In the last few weeks, I explained how to trade crypto anonymously and presented you with a quick guide to forex trading for beginners. Today is the time to overlook the topic of stock trading. After all, this is the oldest form of investing money in the financial market.
Table of contents:
1. How Do Stocks Work?
The company issues shares to raise capital to finance its operations and further development. One way to raise funds is to issue shares. Shares can only be issued by joint-stock companies and express ownership of the company’s assets.
2. Initial Public Offering (IPO)
If a company issues shares for the first time, it is called an Initial Public Offering (IPO). At this stage, the company becomes publicly listed, and its shares are traded on the stock exchange. If the company’s shares are already traded on stock exchanges, the company may issue additional shares to raise capital. Investments in IPO shares attract the attention of a wide range of investors because it is the first opportunity to buy shares of dynamically developing companies, like most prominent tech companies from the NASDAQ100 indice.
3. Long-Term Stock Valuation
The long-term increase in profitability is the main factor that makes equity investments so popular. The key to successful investment is generally that the return on investment must beat inflation. Currently, it is about 2.5% annually. The minimum valorization through capital investments must be greater than 2.5%. The maximum annual indexation has yet to be discovered, but the best investors have reached around 20% per year, investing long-term and with large capital.
4. Why Trade Stocks in the First Place?
Before we get to the gist and answer how to start trading stocks, let’s pause for one short minute and answer the ‘why?’.
Trading stocks, similar to trading commodities, real estate, or cryptocurrencies, is a way of achieving the financial freedom available to virtually anyone willing to sacrifice some time and give their best effort.
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Trading stocks is also beneficial for anyone looking to improve their understanding of the market in general, as a large portion of the knowledge is obtained. In contrast, trading stocks is sure to transfer to other markets.
Nowadays, a lot of young traders start by trading crypto. If you are one of them, rest assured because whatever you have previously learned will make your journey that much easier.
5. Dividend: Regular Income Opportunity
- An annual percentage valuation of stocks is one of the opportunities to earn money from equity investments. The second option is the regular payment of dividends, i.e., a share of the company’s profit to shareholders.
- Anyone who owns shares in a company that pays dividends is entitled to that dividend. The company’s general meeting decides on the date and amount of the dividend payment.
- Of course, not every company pays dividends, and not all dividends are equal. The dividend amount is expressed as a fixed amount per share (for example, $10 per share) and is one of the factors affecting the share price.
- The size of the dividend usually depends on the company’s profits, but some companies have no profits and do not pay dividends. Paying regular dividends is a desirable factor for investors, who, in many cases, can decide whether or not to buy shares.
6. How to Start Trading Stocks Safely – A Demo Account
Most new investors’ biggest issue is figuring out how much money they should put into the market. However, this should be fine if you want to understand how the market works. In this case, you can start trading using a demo trading account in a trading app.
A demo account allows you to better understand the market without putting real money on the line. Start by going to https://app.simplefx.com or downloading the SimpleFX app (available for desktop and mobile).
However, if you’re a complete beginner who wants to start trading stocks but needs help knowing where to start, watch this ten-minute video tutorial and spend some time trading using the demo account.
7. Deposit and Trade Within Minutes
Once you have a desktop or mobile app access, you can start trading stocks without unnecessary delays. Whether you’re looking to get right to it and trade with real money or take your time and learn the ins & outs using the demo account, the app offers you everything you may ever need to start trading stocks.
SimpleFX allows you to trade almost instantaneously because it requires no credit card or personal data. If you own a crypto wallet, you can connect it directly to SimpleFX and start trading anonymously within minutes.
We highly recommend depositing stablecoins, such as BUSD or USDC, as they allow you to keep your anonymity and avoid a lot of DeFi-related pains. If you connect your fiat account, you can quickly deposit your fiat after going through additional verification. For crypto freaks, SimpleFX also supports a wide variety of altcoins. It’s worth seeing the complete list of payments.
8. More Than Just Stock Trading
SimpleFX is an excellent choice whether you’re looking to learn how to start trading stocks, crypto, precious metals, or other commodities. There you’ll find 60 currency pairs and no trade commissions.
First-time users can receive up to a $2500 bonus for making their first deposit. So, if you already know what you’re doing and are simply looking for a quick way to start trading, download the SimpleFX app or go to https://app.simplefx.com and start trading anonymously commission-free within minutes.
9. Why Trade Stocks? Summary
- Trading stocks are relatively safe and low-risk investments compared to investments in other assets, such as cryptocurrencies or commodities.
- The main advantage of capital investments, which is always worth keeping in the back of your head, is the high liquidity of the markets. This liquidity allows you to buy or sell shares at virtually any time.
- In addition, when trading stocks, we can count on relatively low transaction fees and the possibility of personal portfolio management.
a. The main disadvantages of stock trading are:
- inability to influence the company’s operations,
- low awareness of retail investors.
- The possibility of bankruptcy of the enterprise in extreme cases.