There are various benefits to trading in the stock market using an online app. You can cut the middleman, pay lesser fees, and buy or sell shares on the go. In fact, with the proliferation of mobile apps designed to facilitate stock trading, this investment avenue has been opened up to a large number of people.
Just download the app, create an account, and start trading – it seems that simple, right? Yes, in theory, you can download an app and start trading just as you would order food, play a game, or read the news through a mobile application. However, in practice, it is not so simple. In order to maximise your gains, optimise your experience and become a skilled trader, you must prepare well before venturing into stock trading on a trading app for beginners.
- What kind of a trader are you?
It is imperative that you identify your trading style before you start stock trading. Question yourself as to how frequently you see yourself engaging with one of the best apps to learn stock market such as the MO Investor app. Based on this, you can understand that if you are a daily trader, or long-term investor. You must research the benefits and drawbacks, risks and rewards of all types of trading.
Day traders buy and sell stocks throughout the day, and can place up to four or five trades in five working days. They often carry out their transactions on borrowed money and can expect quick returns, or debt, if the trades are not profitable. Some traders may choose swing trading – a method that involves trades that can last several weeks. Finally, investors buy and hold stocks for months or even years without engaging in frequent trading activity.
- How much money can you invest?
Long term investments require little capital because there are negligible transaction charges, broker fees and commissions. If you cannot afford to make large transactions, invest small amounts of money in a number of shares you can actually afford. Shorter transactions, meanwhile, require you to possess large amounts of funds at all times.
Other than the capital involved, you must remember that to trade successfully, you should be able to earn back the amount of money you may have spent in carrying out the transaction. You can try to minimise the amount spent on commissions by waiting to make one large order instead of multiple small ones.
- The right broker and trading platform
Some of the qualities you should look for in a broker are low commission and transaction fees, access to research tools and resources, and reliability. Day traders should also ensure they find a broker through whom they can make instant trades, and who provides the option to quickly adjust and cancel orders. You must check if the broker has a good trading platform, such as the best app to start trading with versatile features.
- Practice before you trade
Several online trading apps offer the option to practise trading before you can commit to making an investment. You can try your hand at a simulation where you can place trades without actually pledging any money and assess the results. Once you are ready, you can start creating wealth on the appropriate online mobile app.
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