Are you planning to invest as a full-time trader or part-time trader? Well, this article will introduce you to what stock trading is, the difference between full-time and part-time trader, what it takes to be get started, and also the best trusted online platforms to trade stocks. Stock trading is buying and selling of shares in a company. If someone has over 100 shares, that is termed as a company. Anyone with a lot of patience and determination can do the trading for a living, even if there is little or no money. Both full-time traders and part-time traders aim at making profits.
What is full-time and part-time trading?
Many think that a full-time trader is someone who makes money for 8 hours a day in front of a computer while executing trades. The fact is, a full-time trader is someone who depends on trading activity alone for a living. While a part-time trader is someone with a regular job and makes surplus income from trading. This is a good strategy for those that are not experienced in trading. Full-time and part-time trading has pros and cons, and a trader before making a decision should consider them.
Full-time trading: advantages and disadvantages
One becomes independent- When
you take trading as your full-time career, you become your boss. You don’t
depend on a regular job.
Flexibility- With full-time
trading, you can do it whenever you want at any convenient place of your
Possibility of high profits-
One makes high profits because there is more time to analyze and identify
High dependency on trading
profits- Since you do not have a regular job, you end up depending o the
trading profits and in case there are no profits you might end up not covering
up your bills.
High initial capital- since
there is no regular job, one will require high initial starting capital.
Advanced knowledge of trading-
Before you start a full-time career on trading, you will need advanced
knowledge because this is your only primary source of income.
Limited finance in case things
goes as not expected- at the beginning of the trade, you might lose all your
starting capital. This might end up in a difficult situation in case you do not
have enough capital to start again.
Part-time trading: advantages and disadvantages
Someone makes extra income apart from the regular job.
Part-time trading helps you expand your money-making knowledge.
One can reach financial freedom within a short period.
You do not need huge capital for a start.
You do not need to expertise part-time because there ways for new traders to make profits like social trading.
One cannot focus on analyzing and identifying opportunities to make profits because there is a regular job.
There is limited availability of trading instruments- when you become a part-time trader, there will limited trading opportunities because the available instruments have low volume.
Part-time is time-consuming and ends up spending your spare time on trading.
You cannot make proper high profits because most of the time you have an official job.
Difference between Full-time trading career and Part-time trading career
Requires high capital for start
It does not require a high initial capital
You can focus and identify profit-making opportunities
Since there is a regular job one is not focused well to identify profit-making opportunities
You can trade when you feel like at your convenient place
Consumes your spare time
Has high dependency
There is no high dependency because there is a regular job
There no extra incomes
One makes extra capital through a regular job.
How to get started as a stock trader?
Are you planning to start stock trading? Below are guidelines which will help you get started.
Decide if it is the right strategy for you
You might decide to start stock trading if:
You have already maxed from your employer 401(k) matching dollars and started investment in IRA. 401(k) does not allow the purchase of individual stocks by participants. Therefore, Investing with IRA helps you purchase stocks and trade. When you trade through the IRA account, you will benefit as the taxes are always deferred or avoided completely.
You can also consider trading if your annual maximum contributions are 401(k) and IRA are likely targeting to achieve retirement goals. In this case, opening a taxable brokerage account online will not be a bad idea. This will help you trade within the account.
Get an education
Before you start stock trading, make sure that you have enough advance knowledge about investing and the markets too. There are a lot of online brokers on educational resources who can teach you how to trade and stock marketing. Also, most of these stock traders have education centers and also investment officers who can help you start.
Select an online broker
A beginner should choose an online broke to match needs for a start. You prioritize the trading limits, which always run between $4 and $12 per every trade. Also, a beginner should consider customer support, education resources as well as account. Besides, as a beginner, we should also consider brokers trading software for a streamlined platform.
Conduct research on stocks
When you are done opening the account and ready to start an investment, the nest part is picking stocks. This is the most critical part. Pick one or two stocks and invest a certain amount that you are ready to lose. Don’t add more money to the pot, not unless you know what you are doing, but you can plow gains to the company or into the stock. A thorough analysis should be done on the earnings report of the company, SEC reports, and financial filings, and also outside research reports.
Trusted online platforms to trade stocks
Charles Schwab- This platform is the best for experts.
Robinhood- Best for beginners
E*TRADE- This is best for active traders
Ally Invest- Suitable for cheap trades
Vanguard. This is best for the retired investors
Fidelity- This is for the best research and tools.
By going through this article, you will be able to make the right decision on whether to go for a full-time trading career or part-time trading. As well, you will be able to make minor mistakes as we have tackled what to do when you are investing as a beginner. Are you a beginner, active trader, trading expert, or even a retired investor? Well, in this article, we have recommended the top eight trusted online platforms for you. Consider them, for there is no room for disappointments.