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Low Cost Stock Trading

By Edited Oct 27, 2013 1 1

The basic rule in money trading is to buy low and sell high to survive the trading market. But how come a lot of people are making the same mistakes over and over again? Yes, it's the adrenaline and it's your emotions! Don't get easily baffled as to what or when to buy stocks. Know your stuff first before you strut.

Stock trading needs a stable mind and emotion in order for anyone to succeed. The stock market is loud and exciting that you may get too thrilled that you go on impulse buying and selling. But it is understandable that for a young investors like you, you are enticed by the idea of easy money that is all possible if you buy stocks of the high performing companies at that very moment when they're selling like hot pancakes then just be left dumbfounded when these stocks suddenly plummet down and kiss the ground of bankruptcy.

You are obviously new to the stock trading business so before you invest big time, check out low cost stock trading opportunities first. You must not get too excited or you can loose all your money in just one trading day. Low cost index resources are less unstable. Investing in equities can be a better investment for you as a young investor.

Again, trade planning is important. Being new to this world of trading can be daunting and it so easy to fall trap into the buddy system or hire brokers to do the trading for you. Since you have limited resources, you might as well know your way and do it yourself. You basically save on operating costs; after all, low cost stock trading is still a business which does not only require the actual investment but the right instruments like computers, phones and valuable networking and information gathering in order to stay afloat.

Research will tell you that there are advantages on low cost stock trading. If you invest in low cost stock trading or index fund, you no longer need to put money on corporate analysis to check the companies' health. Index fund is a mutual fund which means that people and small corporations gather the funds together and invest this lot. This type of fund also has low or no expense ratios making it more stable and performing for a longer time. And since low-cost index fund are consisting of dozens and sometimes hundreds of corporations, the diversification diminishes the risks involve. And since, companies are involved with the index fund; individual investors receive a certain amount of protection on their investments and the research needed is already being done for them by the company handling the mutual fund. It also eliminates hefty brokerage commissions. The investors' money is not being charged with overhead expenses.

Stock trading is a volatile business. Knowing the ins and outs of stock trading is of utmost importance especially for a young investor. Before you officially plunge in, have a trading plan, know about stop loss and be aware that your emotions will be a factor as well.


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Comments

Jan 4, 2010 7:54am
A1m0s
"be aware that your emotions will be a factor as well."
That is why many investors do not do well.
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