{"id":59188,"date":"2025-11-12T06:56:17","date_gmt":"2025-11-12T10:56:17","guid":{"rendered":"https:\/\/www.iwillteachyoutoberich.com\/?p=59188"},"modified":"2025-11-13T08:29:05","modified_gmt":"2025-11-13T12:29:05","slug":"how-to-trade-stocks","status":"publish","type":"post","link":"https:\/\/www.iwillteachyoutoberich.com\/how-to-trade-stocks\/","title":{"rendered":"How to Trade Stocks (and find out if trading is right for you)"},"content":{"rendered":"\t\t
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Contrary to what Hollywood would have you believe, trading stocks isn\u2019t a matter of putting on your favorite power suit, picking up a phone, and screaming \u201cSELL! SELL! SELL!\u201d<\/p>\n

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Instead of trying to\u00a0buy and sell hot stocks<\/a>\u00a0in the hopes of striking it rich, I suggest you reframe: Investing is a\u00a0long-term\u00a0strategy to help ensure your financial future.<\/p>\n

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In fact, it\u2019s the single most crucial thing you can do today to make sure you\u2019re ready for retirement and other savings goals. The sooner you start, the easier it is to make long-term goals.\u00a0<\/p>\n

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But I get it. We\u2019ve been led to believe a lot of different things about stocks. Some of them are positive (\u201cyou can get rich by trading stocks!\u201d), some of them not so much (\u201cstocks are risky, ESPECIALLY with the recession\/depression\/financial-crisis-of-the-week just around the corner!\u201d).<\/p>\n

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Luckily, most of that noise is just that. There are more than 100 years of evidence that suggests that by investing in the stock market, you\u2019ll be able to grow your wealth consistently over time.<\/p>\n

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To do that, though, you need to understand the basics of how to trade stocks. Keep reading for a\u00a0beginner\u2019s guide<\/a>\u00a0on everything you need to know about trading stocks.\u00a0<\/p>\n

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What is a stock?<\/h2>\n

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Stocks are investments in a business. When you own a stock, you own part of the company that stock came from.<\/p>\n

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For that reason, stocks are also referred to as \u201cequity,\u201d since you own a small part of the company.<\/p>\n

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The stock price fluctuates depending on how the company is doing. For example, if Company A just released an amazing new product that is selling like crazy, the prices for Company A stocks are going to rise.<\/p>\n

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Alternately, if Company A experiences falling sales, their stocks are likely going to fall as well.<\/p>\n

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Advantages to buying stocks<\/h3>\n

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If your stock is good and the company is flourishing, you can really make a lot of money. The money is also liquid. This means that you can get it at any time by selling your stock.<\/p>\n

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Disadvantages to buying stocks<\/h3>\n

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If a company does poorly, so does your stock. Because a stock isn\u2019t diversified, that can mean disaster for you (although you can easily reduce your risk by picking bigger, solid companies). Also, it\u2019s important to note it\u2019s nearly impossible to game the market \u2014 so it\u2019s not worth trying for the lay investor.<\/strong><\/p>\n

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Those are the basics of what stocks are. Now let\u2019s take a look at how you can actually trade stocks.<\/p>\n

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NOTE: You should only be trading stocks once you have the rest of your financial house in order. That means\u00a0automating your personal finance system<\/a>, maxing out your\u00a0401k and Roth IRA<\/a>, and building an\u00a0emergency fund<\/a>.\u00a0<\/p>\n

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Once you\u2019ve done that, it\u2019s totally fine to invest up to around 5% of your income into stocks. You may also want to consider the option to invest in\u00a0mutual funds<\/a>, or\u00a0ETFs (exchange-traded funds)<\/a>, which are baskets filled with different types of investments (usually stocks) that help decrease your overall risk.<\/p>\n

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What is stock trading?<\/span><\/h2>\n

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\u201cTrading\u201d stock is a bit of a misnomer. All it really refers to is the buying and selling of stock for money. So whenever you buy or sell your equity, that\u2019s considered trading.<\/span><\/p>\n

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And there are two ways you can trade stocks:<\/span><\/p>\n

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