Share Dealing Guide - Learn to Trade on the Stock Market

Trading shares can seem like a terrifying prospect for the uninitiated, and the relatively introspective, elitist world of professional trading does little to encourage newcomers. While trading is no doubt a complicated subject, and one that requires hours of research time and pre-trade learning, that's not to say it's completely off-limits for 'ordinary' people, and indeed many individuals from all walks of life are turning to trading the markets as a supplement to or in place of the regular 9-5.

share trading guide

Share trading at a basic level is relatively straightforward - you buy shares when you think the price is going to rise, only to sell when it does and lock in your profits (and vice versa when shorting stocks). Unfortunately, the markets are seldom so simple, and indeed if they were truly as predictable as we would like, all traders would be millionaires.

But because of the dynamism and the human element to trading, not to mention the vast array of variables that factor in to calculating a share's price, moving with the markets is a seriously difficult task that carries appropriate rewards for those that manage to get it right.

As a new trader starting out, there's very little you can do to stem the tides of the markets when they move against you, and it is inevitable that you will open losing positions from time to time. However, by ensuring you invest both your time and energies in preparation for trading, including researching and learning about the markets in which you wish you trade, and take adequate steps to preserve capital and minimize your losses when they do occur, you're working towards building more stable foundations on which to base your future trading success.

Share dealing is often thought of as a means of making money, of speculation, rather than a profession. In fact, it is a discipline that requires an investment of both capital and intellect in order to achieve any degree of success. Becoming a successful share trader requires knowledge of how markets and shares work, along with a keen and consistently developing understanding of current affairs and market shaping events.

Share dealing is much more difficult than it might seem, and the process of learning how to trade successfully is often paved with hard work and expensive, unfortunate mistakes. So what constitutes the most effective path to learning how to trade profitably, and how can the inevitable losses best be avoided along the way?

Research the Trades

The first step in learning how to trade shares successfully is research. Only those that understand how and what they're trading can expect to see success long-term, and unless you're coming from a financial background, there's much to learn. Read up on market theory, knowledge and practices, because there is no time to learn this stuff on the job.

The preparation that goes in to learning how shares and markets work is an essential pre-requisite to thinking about strategy and market approach, and the best path to share dealing always starts with laying solid informational foundations. In practice, both new and experienced spread bettors continue to learn as they trade and experience new market challenges, and there is no substitute for research and understanding when it comes to trading your capital profitably.

Follow the Markets

Research isn't a preparatory burden only - any successful share trader needs to keep a constant perspective on market news and events on a day-to-day, hour-to-hour basis. This means following and reading the markets through their ups and downs and reading up on the latest events and circumstances that shape the way the markets behave.

Before contemplating trading your capital, it's important to follow the markets and the news cycle and draw your own parallels and experiences to shape future trading decisions. Keeping on top of the markets and following goings on as you learn and develop as a trader can serve in some part to compensate your lack of market experience, and the more you immerse yourself in the markets prior to trading, the more likely you are to develop positive trading behaviours.

Trade Shares In Demo while Learning

With research ongoing, there can be no better way to test strategies, interact with the markets and generally familiarise yourself with the practicalities and the ups and downs of trading the markets than through trading a demo account. Demo accounts enables traders to invest in the real shares markets, only with virtual transactions and virtual liabilities - the perfect save-haven for learning your craft. Trade through a demo account as soon as you feel you're ready to approach the markets, and trade as consistently and as realistically as you can. After all, demo accounts are only useful when they are used as an educational trading tool, rather than an excuse to trade in an unrealistically risky or gung-ho way.