Most people have thought at some time about getting involved with stocks and shares. Recent boons have seen share prices for the likes of Zoom, Games Workshop, and Tesco all soaring and has had made many people kick themselves on reflection.
A trading journey comes as much from analysing previous market data and present conditions as it does from having a gut feeling about how something may perform and where the next trend may lie. But, despite having an idea about getting involved, many people feel that the barriers to their trading journey are too high. So, what can complete novices do to get involved with trading?
Look into Forex
Forex trading is essentially currency exchange on a greater scale. In some ways, the bureau de change engages in forex trading daily – offering to sell you currency in exchange for other currency, and usually making a small profit. There are many online methods to get involved with this, which involves very little outlay and only a basic understanding of what might affect the price of a currency. The benefits of forex trading for complete novices is that it can be as costly as you want.
Begin with CFDs
CFDs (contracts for difference) involve trading based on the share price of an asset without owning the underlying asset itself. You get back the difference between the current price and what it is at the of the contract. By not owning anything outright, the initial capital involved is lower than with traditional stocks. When looking for the best CFD platform some people look for low fees, others look for levels of regulation, and others look for the portfolio options of each particular platform. Beginners can take advantage of the low barrier to entry for CFDs and can learn more about stocks as they progress through their trading journey.
Stocks and Shares ISA
Understanding the desire to get involved with trading, many banks offer ISAs that involve stocks and shares trading. Stocks and shares ISAs work like savings ISAs but involve investment. Some offer better tax breaks, such as not paying capital gains tax on profits made within the ISA wrapper. But with any investment, there is a chance that you could lose the money. However, as many financial experts point out, some cash ISAs lose money if the interest rate doesn’t keep up with inflation – you lose money in ‘real terms’,
Trading doesn’t need to be the complicated affair it is sometimes made out to be. The concept involves speculating on possible price increases or decreases of the intrinsic value of something based on the contextual cues of society, the economy, and the company itself. Elon Musk’s Tesla’s share price fluctuates depending on what the mogul tweets, while oil stock prices can be influenced by legislation regarding the environment.
Once you begin trading, you’ll realise that there isn’t a lot of complexities involved – it just comes down to taking in information and analysing it alongside your instincts. These are skills that many already possess.