How to become a private investor in the stock market?
So, if You are interested to receive the income on the stock market, You need to have the technical ability to buy or sell shares. For the private investor access to the exchange takes place through a broker. Broker (brokerage company) - a legal entity holding a license for brokerage activity, which provides services to its customers access to the stock exchange. To do this, the broker shall conclude with the customer a contract on broker services, in accordance with which to provide You with access to the stock market. Don't forget, the broker always has a license for brokerage activity! If You offer brokerage services without the license is deceiving You.
When a brokerage agreement is concluded, You are given access to the trading terminal, which allows the trading of shares on the stock exchange directly through the Internet. This is called the technology of the Internet-trading. 15-20 years ago the trades in shares held in a mode of a voice auction. This was the stock exchange, the image of which we all are accustomed to see on TV. People were shouting, gesticulating, actively moving. Exchange is a big room with a lot of people. Now such bidding is already a thing of the past. Now the exchange is a legal entity, which allows the buyers and the sellers of the shares to locate each other, but not by means of personal meetings, and through the Internet. Thus, access to the exchange now simple. For this it is necessary to conclude the contract with the broker, to have access to the Internet and install on your computer the trading terminal. Then, the stock exchange will be right at Your home.
At this early stage, opening the trading platform on your computer, You can just study quotes, information, gain experience, risking nothing. The minimum sum on which you can practice in the implementation of at least some operations with shares of 5-10 thousand. $. The average amount of money, with which now employs many new private investors, is about 100 thousand. $.
For the provision of access to stock trading broker with You will take a fee. In accordance with the contract of brokerage services, your costs would be:
The Commission of the turnover (from 0.025% to 0,048% depending on the turnover for the day - the more the volume of transactions, the less Commission). Charged at the end of the day, if the tariff plan provides the Commission with the turnover for the day or at the end of the month, if the tariff plan provides the Commission with the turnover for the month.
The Commission of the exchange (0.01% of the sum of the deal). Charged at the time of the transaction.
More information about tariffs can be found, for example, here.
If You want to reduce the risks of losses and avoid common mistakes beginners, get recommendations of analysts and managers of existing at the moment of trading opportunities.
Thus, the selection of the broker, the conclusion of the agreement on brokerage services and install the trading terminal to your computer - the first step to becoming a private investor in the stock market.
The second step that you need to undergo training. On-opportunities - full-time, but in case of absence of such a possibility, it is quite suitable remote training in YouTube laid out a wide range of materials and records of the past training activities on the stock market, affecting aspects of the training of both beginners and those who already has some experience. Training will help You understand the General principles of the investment and to define its niche on the stock market - investment strategy. Also, the training will help You learn from the experience of existing investors and avoid typical mistakes. In the end, training will give You the knowledge, with the help of which You will be able to talk with the professionals of the stock market in the same language, to understand the essence of what they say and to ask the right questions, fully aware of the meaning of the existing problems. Successful investing without learning is practically impossible.
The third step is necessary in order to determine how much income You want to earn on the stock exchange - investment or speculative, to what extent (what kind of yield You are interested in?) and what are the risks on their own capital You are willing to accept?
All this You can do in the process of learning or immediately after it. The fact is that there is a specificity of obtaining various types of income - investment income requires patience and a long period of time, it is not at all necessary every day spend a lot of time on the analysis of the market . Speculative gains, on the other hand, requires more knowledge, more daily attention to the market, but you can get it much faster. And of course, in case of success of speculative income may at times exceed the investment. About all kinds of tactics and strategy of obtaining investment and speculative profit You in detail will tell on training. Now briefly dwell on only on the main issues related to obtaining various types of income.
In order to earn investment income - it is necessary to form the index portfolio. As already mentioned, for a longer period of time profitability index portfolio could be between 30% and above. However, it should be remembered that in the case of a negative scenario of development of events on the stock market in the short period of time may fall in the market value of the index portfolio. For this reason, the build up of index portfolio makes sense only if You invest for a term of 1-3 years and more. As a result of the growth of the temporary period of the investment risks of losses on the investment portfolio substantially reduced. Formation and management of the index portfolio requires not a complex of knowledge, so getting the investment income is not time-consuming and difficult process.
Earn speculative gains need to do a little differently. As already noted above, the speculative gains requires from the investor better than the other investors, understanding of the situation on the market. What are the knowledge and skills necessary for obtaining a speculative income?
Firstly, it risk management, which includes the assessment and control of risks. Secondly, the methods and instruments of stock market analysis: fundamental and technical analysis.
In the third, the development of a trading strategy with a view to obtaining a speculative income.
Remember, getting speculative income requires not only a basic knowledge, but also practice their own experiences of flair! Of course, for the receipt of speculative income is required to devote more time to the daily analysis.
The fourth step is making money on the account and start working with shares. Any investment requires patience, so Your enthusiasm may run out in two-three months. This is normal. This investor is the one who is able to overcome the emotional decline and stay on the market for a year and longer.
The fifth step - if properly designed and carried out by the trading strategy, with the passage of time should not forget to get their income. Taxation in the stock market shall be paid by Your broker to obtain the money directly to You, because it is a tax agent. Tax on income of physical persons shall be paid either after the tax period (year) or proportionally to the actual investor profits from the account during the year.
