How To Start Trading on the Sharemarket

Many people dabble in stocks nowadays, whether it be investing or online share trading, you are in it for the money. The difference is in how the money is made: an investors' goal is for capital growth in the long term and an income from dividends while a share trader looks at making money purely from capital growth, typically in the short term.

It is so easy to get started on trading on the sharemarket yourself compared to just a decade ago. Last decade you needed to buy a terminal and subscribe to a service to be able to do your own trading at home - just like Gordon Gecko in Wall St. Now stockbrokers are throwing you free software or have free online portals for you to be able to transact live on the sharemarket. They are also offering really cheap brokerage commissions and additional services like free reports, research tools, stock recommendations and stock information.

How do I Start Trading?

So how do you start trading online? Whether if you want to actively undertake online share trading or investing on the sharemarket the process is simple. First you need to learn and educate yourself on the jargon and concepts and then second you need to signup to some brokers. Some people even sign up with multiple brokers to take advantage of different free features and services. What kind of things do you need to learn about? First of all you need to be aware of the risks. You don't want to end up in the same boat as the people who bought BrisConnections shares. Then you need to start understanding some basic market terminology such as share buy backs, initial public offers, takeover bids, share placements, dividends, ex dividend dates and more. then you'll also need to start reading up on other share market basics, strategies in investing.

You can start trading via a full service broker which tend to charge more for their services, but can give their clients detailed advice about their investment or trading activities. Or you can go cheap by using an online or telephone share broker like CommSec or E*TRADE. Trade brokerage commissions typically start around the $30 mark but vary depending on the size and frequency of your trades.

How do I Pick Shares to Buy on the Sharemarket?

Since you are just wanting to start trading on the sharemarket, here are a few basic tips to help you pick shares to buy on the sharemarket:

• Have a trading strategy to fit your own financial needs. Is your investing or trading strategy going to be aggressive or passive?
• Consider your risk profile. Are you a risk taker and a lover of speculation or more into a safer plan of slow and steady wealth accumulation?
• Know when to sell and exit. What are your goals for that particular stock?
• Anything too good to be true probably is. Avoid hot tips. (Of course there are exceptions to this like all rules)