The reason for this is often a lack of understanding of the stock market basics. It’s important to take your time to learn about different brokers, different trading styles, risk management, strategy and much more.

I was all to eager to get started trading at first, I didn’t spend anywhere near enough time learning how to trade stocks.

This website’s aim is to provide helpful tutorials on the stock market basics to help you get started. Some of these I have written personally and others have been submitted by other visitors to the site.

If you have an article you feel will help the community here learn about stocks, please send it for inclusion on the site.

As well finding a broker that gives you cheap stock trades, you need to use a good trading system. No system is perfect and wins all of the time, but a good strategy will consistently make you a profit in the long term.

When buying stocks, it is always imperative to be realistic and take a long term view. You are highly unlikely to get rich over night trading the stock market, but have you have a great chance of being successful in the long term.

Before you start reading my stock trading site or begin trading, I just feel it’s very important to mention that I strongly recommend that you only buy stocks with money you can comfortably afford to lose. This is not to say you will lose money, but it’s better safe than sorry, right?

Before you begin trading, it is very important to learn the stock market basics. Like many, when I began trading I didn’t take enough time learning the basics. I thought I would be okay diving straight in

This resulted in me being confused and caused me to lose money. One of my favorite phrases can be applied to trading stocks. Failing to prepare is preparing to fail.

You will undoubtedly make mistakes while you are still learning. It is natural, but one thing that has greatly helped me to succeed is to do my best to never make the same mistake twice.

Now what is stock trading? Good question. To put it simply, stock trading is where you buy shares in a company with the plan of selling them later at a higher price.

I hope I do not sound flippant with the above defination. I don’t wish to make it sound that trading is easy and without risk, because it certainly isn’t.

Most of the time to trade stocks, you need a stock broker to buy and sell stocks. They are less commonly traded using a dividend reinvestment plan (DRIP). This is where a company offers individuals the opportunity to buy shares in their company directly, bypassing the need for a broker.

There are many different styles of trading. Some traders like to use a buy and hold trading style. As the name suggests, this is where a trader purchases a stock and holds onto it for a considerable period of time before selling it.

On the other side there is scalping. There is where a trader buys a stock with the intention of profiting from a very small move. Scalping strategies usually involve opening and closing a trade during the same trading day.

As you are probably aware, stock prices fluctuate daily. Sometimes they rise and sometimes they fall. Stock trading is the buying and selling of stocks with the aim of making a profit on these fluctuations.

Stocks are traded (bought and sold) over a stock exchange. This is a giant marketplace where all the listed stocks can be bought and sold readily. As the major stock exchanges have huge numbers of trades every day, there are always buyers and sellers of the stock you may want to purchase. The exchange links the buyers and sellers together.

If you are new to trading stocks, you will have probably heard of some of the major stock exchanges at some point. Two of the major ones are the New York Stock Exchange (NYSE) and the NASDAQ.

Floor Trading and Electronic Trading

Some stock exchanges have a trading floor whilst others are completed electronic. You may have seen floor trading in action on the television. It generally comes across as very hectic with people looking at monitors getting emotional, talking on the phone, using computers to place trades and generally shouting a lot!

With floor trading a real human being links up the buyer to the seller. The NYSE matches both buyers and sellers together manually and there are often in excess of 1.5 billion shares traded per day. It must be a huge job!

With electronic trading, there is no need for a trading floor as all trades are handled by powerful computers, automatically matching buyers with sellers. The NASDAQ exchange is fully electronic.

Do you need a stock broker?

To buy stocks directly over the exchange you need to become a member. The cost of this is much too high for most individual traders. We need a middle man who is a member to buy the stocks for us.

This is where a stock broker comes in. A stock broker has membership to the major exchanges and can buy stocks for us. However, we have the full rights and ownership to them.

Most stock brokers charge us a fee for each stock trade that we make. Some brokers are good, others are not so good. For detailed reviews, check out the online stock brokers section of the site.