Lots of beginners have this question. “Can I rely on stock trading to make a living?” If you have observed the financial life of a writer or a painter, you must know they don’t always have a gig. They hardly have a fixed income. As a trader online, your situation will be similar. So can you actually take the risk of quitting your day job and support yourself by stock trading? Read on to find out.
Of course, you can make money with stock trading. However, whether or not it’s the right business to choose for making a living is a tough question. Lots of novice investors end up taking a leap of faith by deciding they will learn a living from the stock market. Some become successful but a majority of them simply blow up their accounts.
Don’t fret, there is still hope. There are lots of traders out there making a good living by trading stocks. They have been able to do that successfully over the years. It’s absolutely possible to carve your own living from the market. It will give you all the freedom you need. However, it is not easy.
How to Get Started As a New Stock Trader?
If you really want to make a living, you first need to get started. These are some steps that will help you out in your journey:
- Research, research, research: Even the leading traders in the world don’t rest when it’s a matter of research. And you are just a newbie. You need to learn a lot of things and the first of them is the market trends. Follow the reputable sources to stay updated on the current market happenings. You can also follow the social media accounts of industry experts, economists, and successful traders.
- Sign up for an account with a trading website: You feel like you are ready to get started? It’s time to create an account with a reputable trading website. You must check its BBB rating to be certain the website is legitimate. Evaluate your options and compare different websites on the basis of their transaction fees, features, and other charges.
- Practice trading: Research alone is not enough, you can only get better as you practice. Lots of trading platforms give you the opportunity to develop a demo account and practice trading without the fear of losing your money. It will help you become familiar with the process of trading and making the right decisions about the stock market.
New traders approach the market from a general perspective. That’s the right approach but as your experience grows, you might want to focus on an area you are best at. There are plenty of options in the market. You can start by focusing on the small area of the market and gain experience there.
Stock trading can be taken as a full-time job. Some people are also enjoying it as a part-time thing. The choice is entirely yours. You can also make money with stocks by trading at home or pursuing it as a day trading career. But how is that done? You can either trade through a mutual fund or work with a broker. You can also join an online community related to stock trading.
How Much Can You Make From Stocks?
Now a question that deserves your attention is how much can you make from stocks? This entirely depends on your trading strategy. But there are other factors that influence your monthly income, too, such as your area of expertise or market performance. Professional traders working full-time can make up to $5,000 a month. The return also depends on how much money you invested. If you are starting part-time, you can manage to make hundreds or even thousands per month. As your experience and skills increase, your monthly income has the potential to increase as well.
Ways to Increase Your Income
- Diversify: A good plan to see consistent gains is to go for diversification. You need a solid understanding of the market first. Plus, you must have good knowledge about the company that’s stock you are planning to buy. Diversification protects you against fluctuations in the market. For instance, if all the stocks you invested in are related to tech and due to unforeseen market conditions, the prices of tech stocks fall, you will suffer from a loss. It is hence recommended to invest a variety of stocks so that one can compensate for the loss of another.
- Reinvest: Once you have made a profit, you will feel tempted to walk away. But if you want more success, it’s a wise approach to reinvest your earnings. You can either reinvest in stocks or in a retirement/savings account.
One of the best ways of making money from CFD stock trading is to watch what expert traders do. By studying them, you can learn how experts calculate decisions. You can then follow their approach and walk on the same path of success as your mentors.
Apart from your own knowledge and skills, you will find multiple resources to help you make better decisions and increase your earning potential.