The Kickass Entrepreneur
  • About
  • Blog
    • All Blogs
    • Create Wealth (Investing)
    • Entrepreneur Interviews
    • Featured Top Posts
    • Growing Profits
    • Growing Revenues
    • Marketing
    • Positive State of Mind
    • Real Estate Investing
    • Retirement
    • Sales
    • Selling your Business
  • Book
  • Courses
  • Podcast
  • Resources
  • Contact
The Kickass Entrepreneur
Subscribe
The Kickass Entrepreneur
  • About
  • Blog
    • All Blogs
    • Create Wealth (Investing)
    • Entrepreneur Interviews
    • Featured Top Posts
    • Growing Profits
    • Growing Revenues
    • Marketing
    • Positive State of Mind
    • Real Estate Investing
    • Retirement
    • Sales
    • Selling your Business
  • Book
  • Courses
  • Podcast
  • Resources
  • Contact
  • Growing Profits

5 Things You Absolutely Need to Know Before Investing in Stocks

  • March 9, 2021
  • 463 views
  • 4 minute read
  • Meg Rivera
man doing stocks
Share
Tweet
Share

Reports of stock traders who made millions in a short time are always told and retold, pushing people to consider giving it a try too. That is not a bad idea but taking off cash and dropping it into various stocks is the easy part.

With statistics showing that most retail traders lose money every year, the big question is, “What is the best way to invest and become successful in the stock market?”

5 Things You Absolutely Need to Know Before Investing in Stocks

The truth about trading stocks is that it requires inherent knowledge of the markets, commitment, and a lot of patience. This post outlines the five most important things that you need to know before investing in stocks.

You Should Never Jump Blindly Into the Stock Markets

When discussions with colleagues at work or friends head towards the stocks niche and how the stocks help people make a lot of money fast, if you enter the market to follow mainstream fashion simply, it is likely to be full of disappointments and losses.

To invest in the stock market, you should start by getting the necessary knowledge and building a reliable trading strategy.

At this point, you need to understand the different stocks and how they operate. For example, should you trade USA 500 stocks or other smaller stocks?

When still at the basics, you also need to get acquainted with the trading platforms. Here, you need to get a good broker with an easy-to-use platform, low transaction costs, and a diversity of assets.

Furthermore, the broker’s platform should be secure and support multiple payment methods.

The Stock Market is Not a Get Rich Quick Scheme

You have probably heard stories about investors who made their fortunes in just one market. As a result, some new traders hold the view that stock trading is a money-making machine. This is a misconception.

Those who make a lot of money through stocks do so because they have a good understanding of the stock market. Indeed, some of them will have taken years learning how to trade stocks before the big breakthrough. To get the full picture, you also need to appreciate that many people mark losses and even quit trading.

If you want to make trading stocks more successful, it is essential to be tenacious. Even if you have a strategy that worked so well for others, it might fail to yield the anticipated results in your situation. To get the anticipated success, look for a strategy that matches your trading style and focus on improving it.

In Stocks, You Should Only Invest Surplus Funds

While it is true that investing in the stock market can be rewarding, the risk of losing money still looms. When investing in stocks, the market can change because of what is happening across the globe and rapidly change the trend, a development that can cause huge losses.

If you talk to experienced traders, they will tell you that they also lose money, but never give up.

As a new stock trader, the best approach to losses is investing only the money you can afford to lose. So, go back to your budget, ensure that all requirements are taken care of, and only invest surplus funds in stocks. Also, you should adopt reasonable risk management measures, including the following:

  • Using a stop-loss order to minimize losses when the market goes against your prediction. Also, consider using a trailing stop-loss because it helps reduce the risk and locks the profit you had made.
  • Limit the amount of money that you can use on a single trade to only a small percent, preferably less than 2%, of your capital. This implies that if the market moves against your prediction, the maximum loss per trade would be about 2%.

Herd Mentality can Result in Huge Losses

In the stock market, smart moves are only possible if you apply the right skill, tools, and use a good strategy. However, herd mentality is influenced by actions that you hear from others and spreading the recommendation without carrying your analysis.

Most new traders use the herd mentality to fear missing out (FOMO) but fail and incur losses.

Instead of using herd mentality, you should target being ahead of others in the stock market by following critical events on the market and determining how they are likely to affect the stocks of choice.

For example, if the federal government is about to announce positive reports of improving employment rates following the discovery of COVID-19 vaccines, try to establish how your preferred stocks will respond.

Then, look for trading opportunities to take advantage of the expected market shifts.

Diversifying is Good, But You should Not Overdo It

You have probably heard the saying that ‘you should never put all your cash in one stock.’ It is best applied here in the stock market. By working with different assets, you can spread the risk and increase exposure.

For example, you might consider SDS trading and tech 100 stocks to profit from both commodities and stocks.

However, you should be careful to avoid over-diversification because it is likely to analyze the selected assets difficult. As a starter, you should consider working with two or three assets and only grow them after gaining more trading experience.

Conclusion

If you are planning to join the stock market, it is vital to appreciate that your success is based on acquiring and using the right skills. The above five things that we have listed are only a few of what you need to know to operate successfully.

Every time you move on the stock market, be it opening a new position or exiting the trade, there should be a sound reason for it.

Finally, you should progressively analyze your trading strategy by reviewing it to identify areas of weakness and improving on them.

Thank you for your interest in THE KICKASS ENTREPRENEUR'S GUIDE TO INVESTING. Three Simple Steps to Build Massive Wealth with your Business's Profits. Please check your email to confirm the book download. Form: 400529

There was an error submitting your subscription. Please try again.

Related Posts:

  • 4 Online Stocks To Look Forward in 2021
  • How Entrepreneurs Can Trade Penny Stocks As A Side Hustle
  • Haram and Halal Investment Options and Halal Stocks in the USA and Canada
  • Copywriting 101: 8 Things To Know
  • 6 Things You Need to Do Now If You Want to Sell Your Business
  • 15 Things You Should Never Do When Prospecting Via LinkedIn
Share
Tweet
Share
Avatar
Meg Rivera

Previous Article
coffee shop
  • Financial and Investment Calculators and Economic Data
  • Sales

5 Ways to Start a Budget-Friendly Business

  • March 9, 2021
  • Meg Rivera
View Post
Next Article
email
  • All Blogs

How To Authenticate Your Emails?

  • March 9, 2021
  • Meg Rivera
View Post
You May Also Like
SEO construction
View Post
  • Growing Profits

8 Benefits of using SEO for a construction company

  • April 14, 2021
  • Meg Rivera
sheet metal
View Post
  • Growing Profits

How to Successfully Kickstart Your Sheet Metal Fabrication Business

  • April 7, 2021
  • Meg Rivera
ecommerce
View Post
  • Growing Profits

Improving eCommerce Sales: Automation and 5 Other Strategies

  • April 6, 2021
  • Meg Rivera
linkedin
View Post
  • Growing Profits

15 Things You Should Never Do When Prospecting Via LinkedIn

  • April 2, 2021
  • Meg Rivera
exchange of money and invoice
View Post
  • Growing Profits

5 Processes for Subcontractors to Get Paid on Time

  • April 1, 2021
  • Meg Rivera
girl writing
View Post
  • Growing Profits

6 Tactics to Step Up Your Customer Retention Efforts

  • March 25, 2021
  • Meg Rivera
man typing
View Post
  • Growing Profits

4 Tried and Tested Ways of Driving High-Converting Traffic to Your Site

  • March 23, 2021
  • Meg Rivera
macbook
View Post
  • Growing Profits

Five Tips for Integrating an Online Store with a Physical Retail Store

  • March 16, 2021
  • Meg Rivera

Join 6,472 Entrepreneurs That Get My Business Building and Wealth Creation Posts by Email

I can teach you how to build a successful, profitable business, and turn that into millions in personal wealth.

Thank you for your interest in THE KICKASS ENTREPRENEUR'S GUIDE TO INVESTING. Three Simple Steps to Build Massive Wealth with your Business's Profits. Please check your email to confirm the book download. Form: 400529

There was an error submitting your subscription. Please try again.

We won’t send you spam. Unsubscribe at any time.

Recent Posts
  • SEO google 1
    SEO and How It Works: Guide for Beginners
    • April 15, 2021
  • Singapore 2
    Necessary Documents for Company Registration in Singapore
    • April 15, 2021
  • SEO construction 3
    8 Benefits of using SEO for a construction company
    • April 14, 2021
  • man doing stocks 4
    4 Online Stocks To Look Forward in 2021
    • April 13, 2021
  • freelancer 5
    10 Productivity Tips for Freelancers and Self-Employed
    • April 13, 2021
Featured Posts
  • How to Buy an Apartment Building
    How To Buy An Apartment Building And Make A Whopping 110% In Three Years
  • Become a Decamillionaire
    How to Become a Decamillionaire, Grow your Net Worth to $10 Million, and Join the 1% Club
  • Most Profitable Small Businesses
    27 of the Most Profitable Small Businesses to Open in 2021
Categories
  • All Blogs (214)
  • Canadian Financial Products (4)
  • Create Wealth (Investing) (57)
  • Entrepreneur Interviews (11)
  • Featured Post for Main Menu (4)
  • Featured Top Posts (21)
  • Financial and Investment Calculators and Economic Data (17)
  • Growing Profits (31)
  • Growing Revenues (75)
  • Growing Revenues (43)
  • Marketing (20)
  • Positive State of Mind (36)
  • Real Estate Investing (10)
  • Retirement (13)
  • Reviews (8)
  • Sales (11)
  • Sell Me This Pen (2)
  • Selling your Business (13)
  • Top Products (2)
  • Uncategorized (40)
Follow us
Author
Jeff Wiener
Jeff Wiener
Jeff sold his company to private equity in 2017 and is now semi-retired. Jeff spends time…

    CHECK OUT MY BLOG, AND SUBSCRIBE

    about
    The Kickass Entrepreneur

    Expand Your Business, Improve Profits, Create Wealth

    Expand your business, improve your profits, and create wealth. Each one of the three can be elusive goals. Follow the right steps, and you, too, can create financial independence. It is possible … you just have to take the right steps.
    NAVIGATION
    • About
    • Blog
      • All Blogs
      • Create Wealth (Investing)
      • Entrepreneur Interviews
      • Featured Top Posts
      • Growing Profits
      • Growing Revenues
      • Marketing
      • Positive State of Mind
      • Real Estate Investing
      • Retirement
      • Sales
      • Selling your Business
    • Book
    • Courses
    • Podcast
    • Resources
    • Contact
    TAGS
    apartment BATNA Business business failure business growth business sale Capitalization Rate CAP Rate cash cash flow Creating Wealth Discipline entrepreneur entrepreneurship excel Featured goal setting Growing Business investing investment real estate M&A marketing Marketing KPIs Mergers and Acquisitions | M&A | Entrepreneur Blog Millionaire millionaire next door mistakes MUR Negotiation Peter Principle Profit profitability real estate retirement revenue Revenues sales sales management Semi-Retirement Blog | Entrepreneur Blog | Small Business Blog small business Stagnant stocks success Thomas Stanley wealth
    RECENT ARTICLES
    • SEO google
      SEO and How It Works: Guide for Beginners
      • April 15, 2021
    • SEO construction
      8 Benefits of using SEO for a construction company
      • April 14, 2021
    • man doing stocks
      4 Online Stocks To Look Forward in 2021
      • April 13, 2021
    • freelancer
      10 Productivity Tips for Freelancers and Self-Employed
      • April 13, 2021
    • linkedin logo
      Leveraging Linkedin for Real Estate Success
      • April 12, 2021
    • man typing
      10 Tasks to Outsource Immediately for Business Growth
      • April 7, 2021
    The Kickass Entrepreneur
    • Coaching
    • Book
    • Blog
    • Contact
    • Privacy Policy
    • Terms
    • Disclaimer
    • Facebook
    • LinkedIn

    Input your search keywords and press Enter.