General investment advice for beginners in online stock trading

This is the final article of the series on online stock trading for beginners and I will be sharing some stock investment advice. I will discuss about simple money management mainly and a couple of trading tips I found out along the way by forex trading and buying stocks with real money.

Money management will play a key role in your trading career. Consider your trading capital as your business. You lose your capital, you lose your business, you quit. Treat your capital with respect and don’t take big risks. As long as your trading system is a winning system, don’t worry about variance. In the long run, you will make money. However, the best online stock trading system isn’t enough if not accompanied by proper money management. Learn not to risk more than 2% of your capital in any trade. Some traders increase this number to 5%. I’d say go for 1% until you get used to online trading. If you think your starting capital isn’t big enough to return adequate profits, continue paper trading until you somehow increase your capital to an acceptable figure. Don’t increase your trade sizes in order to make money quickly, you will end up unemployed. I can’t emphasize more how important is money management in stock and forex trading. Hopefully reading other articles about online stock trading will help.

Besides money management, my other investment advice has to do with computer hardware and sitting position! First, you need a rather reliable computer and reliable internet connection. Some traders have backup internet connections and most have a laptop or another computer to close trading positions, in case something happens to the main computer. You don’t need to spend a fortune on computer hardware, but do spend some money on computer equipment. The computer will be the tool to take your trading business online. You don’t have that many costs comparing to a retail store or a land based business.

Having a comfortable chair and a big office desk are a must. We as stock traders spend hours sitting in front of a computer screen. We don’t want to get easily tired by some 10$ chair. Invest in a very good chair and forget. Money may be everything for most people, but there comes a time when health problems strike on our door and we evaluate our needs better. Don’t wait for that moment, spend on a good chair and exercise as often as possible, taking walks, doing sports and not visiting the fridge that often. Smoking and drinking during online stock trading aren’t expected to help you either. Finally a well organized and clean office desk always invites you to make money when you sit in front of it!

Most of these articles are expected to have been read by beginners and people totally unfamiliar with online stock trading but willing to learn about investing in stock markets. We have always been beginners at one point. No one was born knowing stuff. We all studied and learnt either from books or online. So, if you are starting out don’t think that there is a mountain to climb in front of you. You just need good guidance and well-written information which won’t eat up your time without meaning. I’ll be making my best efforts in this online stock trading blog to provide all the knowledge I acquire every day in the quickest possible way, so that the readers make the most out of their time.

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