What are some tips for trading stocks and shares for beginners?


Quick Answer

The first tip is for new stock traders to get their feet wet by following one or two individual stocks, explains James Deporre of The Street’s Real Money. Since the financial news and the number of stocks that it covers confuse new stock traders, Deporre recommends forgetting the big financial picture in the beginning.

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What are some tips for trading stocks and shares for beginners?
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Full Answer

Another tip is to avoid low-priced, highly speculative stocks, states Deporre. Many new investors make the mistake of wanting to buy 1,000 shares of high-risk, low-priced stocks than owning fewer shares in bigger companies with low risk. New investors should keep their investments simple by putting a few eggs in one basket and focusing their attention on that basket.

One tip for new investors is to buy shares of companies with damaged stocks and not to buy the stocks of damaged companies, according to Jim Cramer of The Street. Although it is difficult to determine the difference between the two, Cramer recommends keeping a list of stocks that investors love and stepping up to the plate to buy when Wall Street has a fire sale. Beginning investors must take their time when buying during fire sales so they are not holding large amounts of shares if more bad news scares Wall Street.

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