Many people believe that investing in the stock market is risky and that putting your money in a safe savings account at the bank or in a money market account is the wisest financial decision. However, this isa misconception because the money in these accounts is not safe from the effects of inflation and taxation.
For this reason, a number of people see the sense in learning how to invest in the stock market. The following are signs that you too are ready to take the leap.
- You’re interested in earning additional income
This should be the most obvious. A lot of successful investors in the stock market got into it with the intention of making some extra money on the side. Many of them have ended up doing it on a fulltime basis. Stocks are an effective way of creating additional monthly income through regular monthly dividends or through the appreciation of stock prices. You can benefit from both by DEVELOPING A WELL RESEARCHED INVESTMENT STRATEGY
- You’re interested in getting more value for the time you invest
You’re interested in earning as much as you can for every unit of time invested. In other words, you want to earn more dollars per hour for the spare time you invest. Stock market trading is perfect for this because with time, you can increase the profit you make in a given period by improving your investment strategy.
In stock trading, information is highly critical. The more knowledgeable you become in selecting the right stocks, the more money you will make. Investors who invest a lot of time in educating themselves on the factors that affect stock prices benefit from having investment portfolios that outperform those of their peers.
- You’re excited by the prospect of participating in the game
If you’re a big fan of hazard games such as online poker or slots, then you will most likely enjoy the activity of live online trading, leave alone winning. For you, it’s as much about playing the game as it is about winning. You’re not afraid of a challenge and you’re certainly comfortable with a bit of risk.
Note that this is not to say that you should approach live trading in the stock market the same way you would online gambling. These are two different domains, each with its own set of rules. The comparison drawn here is with respect to your level of risk tolerance, which is required to a certain measure for success in the stock market.
- You have only a modest amount of capital to invest
The money you have available to invest is not substantial. Fortunately, that is not a big problem when it comes to learning how to invest in the stock market. You can start out by using a demo account to trade. This will help you learn the ropes so that once you save up a sizable amount of capital, you can start investing real money at a lower risk of loss because of the knowledge you gain.
- You recognize the importance of planning and have learned how to plan well
Are you the kind of person that has to have a good plan before starting anything worthwhile? Do you meticulously create your plans and stay committed to them? High profile investors such as Tim Sykes TIM SYKES are a testament to the value of sticking to a strong strategy. If so, you’ll have a great advantage over a majority of investors in the stock market. Most of them go from trade to trade without following any given strategy.
- You’re clear about what you want
A number of options exist for earning extra monthly income, each with its own set of advantages and disadvantages. It is essential that you identify which among all available financial instruments best suit your investment goals and risk appetite. If, after comparing all the options for investment, you find that stock trading appeals to you the most, that’s a sign you should take the plunge.
- You have a healthy attitude toward stock trading
To live trade successfully, you need to consistently MAINTAIN THE RIGHT FRAME OF MINDWhile a few investors may have this attitude from the start, most have to learn it along the way, usually after making a few mistakes. Qualities that are present in a good live trader include the objectivity needed to make a data-driven decision, discipline to commit to an investment strategy and the patience needed to give the strategy time before desired results can be achieved.
- You don’t easily crumble under highpressure
If you have the nerves needed to go through the inevitable tumultuous periods, then you’re well-equipped to live trade on the stock market. There will certainly be many times when you expect the price of certain stocks to go in one direction only for them to go in the opposite direction. Are you prepared to handle the immense pressure that comes with such occurrences?
During these moments, you’ll need to resist the temptation to abandon your investment strategy and make some ad hoc reactionary decisions AD HOC REACTIONARY DECISIONS as that is never a good idea. You need to trust your strategy and avoid pulling the plug.
- You question everything and trust nobody
The unfortunate truth is that far too many people interested in online stock trading have been victims of scams. It is therefore imperative that you stay vigilant at all times. If whenever someone suggests something that goes against your instinct, you carry out research to ascertain the facts, then you will do well as a stock market trader. In the end, your trust should lie only in the data and in your instinct.
- You realize that live trading is not a path to easy riches
As with other legitimate investment options, returns from stock trading come after a period of learning and committing to a well-documented, testable and replicable investment strategy. If you’re willing to invest the time and effort it takes to become a successful investor, then you have a strong indicator that you are ready to trade stocks online.