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10 Tips for Buying and Selling Stocks

 

The stock market exchange is one of the best ways to earn a considerable amount in the shortest amount of time. It is also the best place to lose millions of dollars in an instant. The stock market exchange is a very volatile environment for your funds if you do not take precautions in every movement you make on your stocks.



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Even though the stock exchange market is a very risky industry, there are ways you can reduce risk. The following are tips for those who are looking to start in this very lucrative industry:



1. Start small– You do not have to spend $30,000 in your initial transaction. Start small so that you can get a grip on how things really work. You can start trading to as low as $1,000 (lower in some brokers) which should be more than enough to help you get acquainted with the basics from experience.



2. Start slow – Stocks are often rated by their risk; the risky ones are those that could earn big but could lose a lot in the shortest amount of time. Dwell instead on low risk stocks which will give you relative success and the losing is not as much as to high risk stocks.



3. Practice – Before you actually trade, learn how you can survive through practice software offered by various stock brokers. Online and offline companies will give you some “dummy money” so that you will know how you will fare when you actually start trading.



4. Target a familiar industry – One of the biggest mistakes you will do in stock exchange is to be persuaded in a lucrative industry even though you are not familiar with their business. Work with an industry that you are currently having business with so that you will know the trends and chances of the trading company to excel.



5. Research – If you really want to trade in an industry you are not familiar, consider researching extensively. There are thousands, or maybe millions of references you can find online regarding the specific industry and company. Be sure to know the company history and its strategies for growth to ensure success.



6. Consider starting in pink sheets – Pink Sheets are the trading platform of companies that are about to become public, small companies that cannot have enough funding and international companies that cannot become public. The stocks are relatively cheap so it is one of the best ways to practice real trading. It is also one of the best places to spot a potentially profitable company.



7. Careful on broker’s fee – A broker is necessary since they can make sure that the trading transaction goes through. Watch out for their asking fees which could be higher than what you actually earn. Ask friends and family if they can recommend brokers for safer and affordable transaction.



8. Considering the trend – One of the best ways to determine if the company will continue to be profitable is to look at the market trend. Notice which company is cashing in the latest news and businesses. This will help you decide if the company will actually work to your advancement.



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9. Do no sit on losing stocks – It is possible that your will encounter failing stocks. Instead of hoping that it will go back to its profitable ways, sell the stocks so that you can start on a different industry. You will only waste time and resources hoping that everything will be all right.



10. Sell at the end of the day – When you are considering selling your stocks; initiate the transaction near the end of the business hours. This will help you protect the price since it will be locked until the next trading day.





Read Next: Before Getting into Forex

 

 

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