How to Start Trading Stocks Using Online Web Trading Platform
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Originally Posted On: https://medium.com/the-investors-handbook/how-to-start-trading-stocks-using-online-web-trading-platform-db20d9f0fb1
Stock trading is a type of trading that prioritizes short-term gains over long-term ones. It can be risky to enter this type of market without proper knowledge. In stock trading, investors aim to make money by buying and selling shares of companies. They closely monitor the price movement of these stocks and then try to sell at a profit.
Unlike traditional stock market investors, who tend to hold on to their positions for the long haul, stock traders use a short-term strategy. While this approach can provide them with quick gains, it can also lead to substantial losses. One important thing to remember is that a single company’s fortunes can change quickly and fall even if it has a good track record.
“Americans’ holdings of corporate equities and mutual fund shares fell to $33 trillion at the end of the second quarter, down from $42 trillion at the start of the year. With major market indexes falling further since July, experts say losses from financial markets could total $9.5 trillion to $10 trillion.” — CNBC.
According to Nathaniel Moore, a financial planner at a company in Fresno, California, stock trading isn’t for the faint of heart. He advises people to avoid taking risks and investing their money if they have the necessary resources.
Online trading platforms allow people to trade stocks easily from their smartphones or computers, which could be a good thing to start your first trading journey.
Before you start trading stocks, let’s first refresh the essential tips on trading via a web trading terminal. We use MetaTrader 5 web platform as an example to give some basic advice.
Open a trading account
The first step to trading stocks online is to open an account on a platform you trust. If you don’t know where to start, try MetaTrader 5. MetaQuotes has released a new web terminal for its popular platform. It allows users to trade from any web browser, and it’s safe to use since all of the data is encrypted. The new version of the web terminal is faster and more efficient and features an updated interface.
A new version of the web terminal allows it to run on different access servers of different brokers. It works as an individual terminal. This eliminates the need for a central server and provides full control over the terminal.
Once you’ve opened an account, fund it with some cash so that you can make the trades. You can transfer money from another bank account or your credit card. Remember that many brokers charge fees for transactions made outside their platform (such as wire transfers), so try to avoid these methods if possible.
Learn How to Use the Features of Your Trading Platform
There are different features that you can use when trading stocks online. The other thing you need to do is learn how to use the features of your trading platform. Some of these features are:
Stock price history
You can determine what price a certain stock was at in the past based on its history. This can help you determine if it is a good time to sell or buy shares of that particular company. You can also use this information to compare how prices have changed over time to determine if they are increasing or decreasing.
Technical analysis tools
Many online trading platforms come with technical analysis tools that allow you to view charts showing how prices have moved in the past, what trends exist, and whether there are any patterns in these movements. This information helps traders make more informed decisions about when and where to buy or sell their investments.
Choose the Stocks You Want to Buy
Now that you know how to use an online trading platform, it’s time to start trading stocks. Before you begin, you must choose the stocks you want to buy. There are a lot of different ways to do this. If you’re starting, it’s probably best to stick with blue-chip stocks, large companies with long histories and solid financials. These companies are more likely to grow steadily over time and less likely to go bankrupt or fail unexpectedly.
Arthur Pinkasovitch, the Investopedia contributor, says that a factor that smart stock-pickers have in common is that they have a clear goal and are committed to sticking with it. They also keep up with the latest news and trends in the stock market. This allows them to make informed decisions when it comes to buying and selling stocks.
If you’re looking for more risk and potential profit, consider small-cap and emerging markets stocks instead. These companies may be smaller and less established than blue-chip stocks, but they also have greater potential for growth because they haven’t been around as long.
The easiest way to find stocks is by using an online stock screener tool like those offered by Yahoo Finance or Google Finance. By entering criteria such as industry, price range, and market cap into their search boxes, these tools will return results of all available stocks that meet your criteria.
Place a Trade Order for Stock Using Your Online trading platform
After opening your account, you can place trades using the software modules provided by your broker. These modules are easy to use and can give you access to many types of securities. You can also use them to view market data and historical performance statistics on individual stocks or groups of stocks.
You may be able to place trades directly from the charting module on your broker’s website, but it is more likely that you will have to use a separate module for this purpose. Many brokers provide a separate trading platform for placing orders and viewing market data. This platform is usually called “trade ticket” or “trade execution screen,” but whatever it is called, it should look similar.
Monitor Your Stocks Over Time
Monitoring your stocks over time is an important part of trading. It’s a good idea to monitor your stocks regularly, even if you’re not actively trading them. You can use the information you gather to determine which stocks are worth keeping and which should be sold.
Monitoring your stocks over time can help you avoid mistakes like holding on to a stock falling in value or selling a stock before it has reached its full potential.
For example, let’s say you bought shares of XYZ company when the price was $40 per share because XYZ had an excellent track record and seemed poised for growth. But then something happened: The economy started to slow down, and XYZ’s profits fell by 20%. The stock is worth only $30 per share — half what you paid!
What should you do? If you’re monitoring your stocks over time, then you’ll know exactly how much XYZ’s value has dropped since you bought shares in it — and that’s important information when deciding whether or not to sell it off now.
Protect Your Investments With Stop-Loss Orders
Keeping your losses as low as possible is important if you have a lot of money invested in the stock market. One way to do that is by setting stop-loss orders on your trades. A stop-loss order lets you set a price at which you want an order executed or removed from an exchange. If the price goes against you, then it will automatically be canceled at that price without any further action required from you. This helps protect against losses if the price moves against your position after you enter into a trade.
Learn as you go
Aside from being a feasible way for anyone to start investing in stocks, online trading platforms are also useful for experienced investors. The latter can create and save their portfolios online and even use them as a medium for online stock trading. They can also perform many different tasks, such as automated buy-and-sell orders, purchase stocks by clicking the “buy” button, or automatically generate stop-loss orders based on their specific criteria.
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