How to Trade Stocks With Confidence

  • July 15, 2020

Do you know how to trade stocks with confidence? Do visions of sharp-dressed men, wearing Rolex's', driving around in their Ferrari's come to mind when you think of traders? What about not having to drive an hour to work and sit in a cubicle?

Or better yet, having the time to spend with your family? Do you think this is possible?  You may be surprised to know it is, and trading is how. The trading arena is not only available to the elite and exclusive.

How to Trade Stocks With Confidence

It's open for every one of us if we decide to play.  Even if you don't want to look like them, there's no reason why you can't share in the profits. So if you want to learn how to trade stocks, keep reading and I'll show you how to get started.

How to Trade Stocks With Confidence

  • If you don't already know this, there are several ways to make money trading securities. First and foremost, you can buy a stock while it is priced at a lower price than the market values it and sell it when the price increases. Buy low, sell high, ring a bell? The difference will be your profit.

For instance, you can buy a stock ABC at $45.80 a share and sell it at $46.10. In such a case, your profit will be $0.30 a share, which can add up to a nice sum if you traded in a thousand shares.

The second option is to use derivatives, such as futures and options to trade in the shares of interest.

Check out our live trading room where we stream during market hours. This can be a great confidence booster as you're starting out. 

1. First Things First, Find A Broker

When you want to get into stock trading, the first thing you need to do is find a suitable broker. There are many local brokers as well as online brokers. Some brokerage firms operate locally while others operate globally.

A lot of people use Robinhood but ThinkorSwim along with some bother brokers are great Robinhood Competitors.

Ideally, prevent being scammed, you should choose a broker that has been licensed by local authorities. The ideal broker should also have an excellent reputation in the industry and a long history of offering the best securities to trade. Be sure to read reviews about the various brokerages and check their ratings before making a decision.

Fund Your Account

You'll need some start-up capital to invest as you start trading. Most brokers have a minimum balance, so be sure to check the requirements stipulated by different brokers before making a decision.

If you only have $500 to invest, the ideal broker should accept this amount. After all, this is the maximum amount of money you are willing to invest in stock trading.

It is important to note that some brokers usually require a substantial amount of cash as minimum account balances before a trader can start trading. Beginners should avoid these firms.

2. How to Trade Stocks With Confidence With the Lure of the Penny Stock

One of the best ways to make money trading in shares is to purchase penny stock. These are the shares of companies that are just coming up. Some of the penny stocks I'm keeping an eye on are those of mineral exploitation companies.

In particular, the oil and gas firms that have many oil exploration blocks around the world. If they strike oil anywhere in the world, and the news is made public, stock prices will move up considerably.

For instance, if a penny stock is $2.50, any positive news can push prices up to $10.00 or more. Our trading alerts have potentially good setups to trade also.

3. The Comfort of the Option

You can use options, such as put and call options in securities trading. These are derivatives that make it possible for you to speculate on how stock prices are going to move.

If you predict that prices are going to go down in a week, you can buy suitable options and wait for prices to go down. If they go up instead, you will lose money.

Derivatives trading can be incredibly profitable as it does not matter how high or how low share prices move; you can make money provided there is movement.

What's excellent about options is that they can be used to grow a small account. Take the example I gave above of stock ABC.

I think I same to assume we all don't have $45,800 lying around to buy 1000 shares of the stock. But, what we do have are options we can buy at a fraction of the price. And by fraction I mean cheap, think only hundreds of dollars.

The options world is an exciting place. Because of this, we put together two great Options Trading courses along with videos and materials to help you learn.

It's worth your while to check it out, especially if you don't have a lot of money to start. The best site to learn stock trading will always give you the tools to feel confident.

4. How to Trade Stocks With Confidence Using Your Strategy

When trading in securities, you have to develop a trading strategy. A strategy is the surest way of ensuring you can make money time and again with every successive trade.

For instance, your trading philosophy can be to purchase blue-chip stocks only. You can also decide to purchase undervalued stock regardless of the industry.

The best investors in the world usually buy the shares of companies that have a long history of success and a reputable management team.

It's possible to buy and sell a stock within a few minutes or hours. High-frequency stock trading is made possible by technology. 

The question most traders often ask is how frequently you should trade? The answer is it depends on several factors.

For starters, your goals will affect your trading decisions. After all, you may want to make small profits frequently. Secondly, your analysis of the market will affect your trading decisions.

For instance, you may project that the price of a stock will continue to drop or rise for a given period, so you can hold the stock for that period before offloading it.

Swing traders and investors take note: to ensure you make profitable trades, you need to stay up to date with business news.

This is important because any announcement made by a given company can affect the prices of other shares. For instance, if an industry leader in smartphone manufacturing releases a new version that is a hit, traders are likely to dump additional shares to buy the shares of that company. 

Instead of rushing to do the same, you can purchase options as well as shares of the companies whose share prices will reduce due to the massive sell-off. 

Find the best time of day to trade stocks as well. Certain times are better than others.

How Do You Gain Confidence in Trading?

  • Trading can be and is daunting. When you're starting out there's so much information and everyone has a hot tip for you. But do you know to trade stocks with confidence on your own? Or do you want to be following someone in and out of trades? Here at the Bullish Bears we're big believers in teaching our community to be able to trade on their own and be confident in it. 

Practice Your Strategy

Before you can start trading with real cash, it is recommended you take your time to practice stock trading with virtual currency.

There are many traders offering dummy accounts to help clients learn how to make profitable trades as well as perfect their trading strategies.

These dummy accounts can be incredibly helpful. If you can make money in a dummy account, you can make real cash with a real trading account.

Personally, I have a bias towards the ThinkorSwim charting platform and simulator. With clean, crisp and concise charting, I have yet to see a platform that can beat it. We have an in depth course on using ThinkorSwim you may find helpful as well.

One downside of the ThinkorSwim simulator is that you need to fund your account to get access to live data. Sadly Canadians need to fund our account with $25,000 to get access to live data- ouch.

how to trade stocks with confidence

I'm not lying when I tell you this; all expert traders got their start in a simulator. Just like a pilot does. There's no way any pilot is let loose to fly a plane without ever first practicing in a simulator. And you should be no different. Furthermore, expert traders and pilots still use a simulator when they either need to practice new strategies or figure out their losses. My point is this, find a simulator that works for you and use it.

Last But Not Least, The Tax Man

Surprise or no surprise here, whether you make a profit or loss in stock trading, you have to pay your taxes. Failure to report and pay the appropriate taxes is tax evasion.

As a result, you may find yourself in serious legal problems. The IRS can even place a lien against your house, car or bank account in an attempt to recover the taxes you have not paid.

For this reason, you should try to keep a proper record of all your trades as well as all the withdrawals and deposits you make to your account.

Whether you're day trading Futures or trading stocks, keep track of your trades and make sure you're getting a tax form from your broker at the end of the year.

My Parting Thoughts

From choosing your broker, funding your account, deciding your strategy and security to trade, there's a lot to think of when getting started in the trading arena.

Luckily, Bullish Bears is there for you and can guide you each step of the way. We have different live trading rooms for day traders, options traders, swing traders and futures traders.

We have a plethora of courses, stock trading tools and great blog topics on everything from risk management and advanced options strategies. I look forward to seeing you and welcome to the arena!

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