It was said that before “Black Thursday” in 1929 Joseph Kennedy sold all his stock. However, many were not that fortunate since most investors have suffered significant cash losses. The crash of the stock market in 1929 was said to be the trademark and beginning of the Great Depression.
Now, why did Kennedy sell all the stock he owned? According to the rumor, a shoeshine boy gave him the stock tip. During the 1920s only the rich can afford to own stocks in the market, so if a shoeshine boy can own stocks, then Kennedy surmise that there must have been something wrong.
At present many common or ordinary people from all walks of life own stock. Making trades available online has undoubtedly made it accessible to anyone who owns a computer with a reliable internet, sufficient funds to register and open a trading account, and a passable understanding of the stock market.
Having a trading manager or personal stock broker trade gbp , and having a substantial capital to invest is no longer necessary since by doing some reading and being familiar on the basics of online trading is more than enough to be able to trade on your own.
Relevantly, an ordinary person trading in the stock market does not mean the market will crash like what happened in the 1920s. This is because the stock market is open and available to anyone who meets the minimum requirements.
However, it is vital that you do not assume that online trading is easy and you can make a big consistent income right away. There are factors that you should consider before opening a trading account online, and in this article, you will learn some essential necessities before you start trading.
Here are some steps that you should take before you can trade online:
- First, learn the terms associated with online stock trading such as stock, dividend, broker, etc.
- Second, choose your preferred online broker. You must be careful in the selection of a broker because the broker will be the one who will execute the buy and sell for you. So take note of all the money requirements including documents that are needed.
- Third, when you are ready to open an account, you can select whether it is going to be an individual or joint account. Then choose once more whether it would be a margin account or cash account. Margin accounts are similar to credit accounts where you can borrow money from the brokerage depending on your available stocks equity.
- Lastly, decide on how your money will be kept by the brokerage. Once this is settled, it is time to fund your account, and you are ready to trade.
When your account is already open, you can now trade stocks. Before doing so, get a real-time quote that will confirm the prices of stocks. After you have seen your quotes and would like to make a trade choose limit order or market order. A limit order is executed at a better market price, while a market order is executed at the current market price. Additional options are offered by some brokers such as stop order, stop limit order, and trailing stop order.
In online trading do a research first before you decide which broker you would like to open an account with. Fraud in stock investment has been present even before online trading became popular, so diligent research on your part will help avoid being scammed.
It is significant to your success as a trader not only to know how to trade but also to protect your investment. Just remember that if a deal looks and sounds like it is the deal of a lifetime then maybe it is.