Investing and trading in financial markets can be exciting and rewarding. That’s because of so many opportunities pop-up every day. At the same time, investing in money markets can be quite intimidating and even more importantly- risky. That’s because while there is an abundant supply of financial opportunities presenting themselves and the risk of losing money on your investment is a clear and present danger. That’s why we at Trade 24 have compiled a comprehensive list of what we believe to be the three most important investor tips, tricks and red flags you need to look out for when making that first initial investment.
- Do your due diligence. There are many securities and stocks that may seem appealing and will draw you to invest in them. But before you buy that first share, make sure you do your homework as well. That’s because you may love shopping at Best Buy and therefore assume they are a company with a lot of financial promise, but that doesn’t necessarily mean that they are a wise investment. Perhaps the company’s finances are managed poorly. Maybe they have incurred a debt that they can’t pay off. All of these factors play a key role in the stock’s current and future value. So before you make that investment, a little bit of research can go a long way.
- Stick to your strategy. One dangerous trap that many new traders, unfortunately, fall into is that they trade on emotion. Seeing the asset, you bought suddenly tank more than you expected causes many amateurs to change course earlier than they should. This method can be a bad long term tactic that can undermine a well thought-out strategy that often involves taking an opposite position with regards to a given asset’s performance. So stick to your strategy, be calculated and try to avoid too many spontaneous decisions.
- You can do it yourself. Many stock brokers will try to convince you that the best people to manage your money, is them. However, this isn’t always the case. That’s because, with a little bit of homework, you can potentially reach the knowledge level of many young stockbrokers yourself. And thanks to the internet, any topic, including trading financial markets, can be researched and mastered by you. This includes learning how to invest money.
Whatever you do, try your best to go with a broker that you trust. There are many great brokers out there. However, some are better than others. That’s why when selecting a brokerage, you may want to speak with their trading advisors and try to get a feel for whether or not they seem to know what they’re talking about. That one phone-consultation could potentially end up saving (and earning) you a lot of money.