The low interest rate phase particularly affects savers. Investing in overnight or fixed deposits brings security, but currently only a low interest rate . Not everyone dares to take the step to buy securities, as buying securities can be confusing for beginners. Those who do not want to settle for low interest rates should take a closer look at stock exchange trading in order to make an investment decision based on the information obtained. For private investors, online securities trading shows the possibility of buying shares. But it's not just stocks that count as securities, bonds, funds, certificates and other financial products also belong to the area. But what can the first steps in securities trading look like? And which security should an investor choose?
Table of contents
- Buying securities - opening a custody account and capitalizing on an account
- What types of securities are there??
- What are the trading hours on German stock exchanges?
- Which entries are required when buying securities when entering an order?
- Buying and selling shares - the right timing
- Securities order - order variants
- Useful tools for beginners
- Conclusion: Securities are easier to buy today than ever
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Purchase of securities - open a securities account and capitalize an account
In order to realize the purchase or sale of securities, investors must first find a broker. A look at the market quickly shows that there are many offers. Which online broker is the best provider can be found out by a broker comparison. The focus is certainly on the trading conditions. Trading fees are a key criterion to consider when choosing a broker. The aim is to achieve a return by buying or selling securities. The return is reduced accordingly by expensive order costs and additional fees.
In addition to the fees for securities trading, investors should also inform themselves about the fees for custody account management. Many online brokers do not incur any fees for managing the custody account. However, there are of course exceptions. Depending on the broker, there may be additional costs for withdrawals. Those who grant, change or delete limits online can usually implement this free of charge. Many brokers require a minimum deposit, which is particularly important for small investors.
If the decision for a broker has been made, the custody account must first be opened. The online application can usually be found quickly on the website of the broker or the direct bank. After all the details have been given, a legitimation must be carried out. In most cases this can be done using the Post-Ident procedure. The video identification process is also partially available. The specification of a reference account is also required. The payments from clearing account are made to this account, which is mostly the checking account. In order to start trading in securities, credit must still be paid into the account.
If you want to carry out the securities trading yourself online, you have to find an online broker or a direct bank and there a custody account open. But before the choice is made prematurely, some time should be invested in a comparison. In this way, you can find the broker who has favorable trading conditions and also meets your own requirements.
What types of securities are there?
By Possibility of online investment, investors can now buy securities easily and conveniently. Investing in securities presents a diverse range of options. Not only opportunity-oriented investment strategies can be implemented in securities trading. Conservative investment strategies can also be implemented with the right securities and investment products. However, investors should always be aware that not only can there be attractive returns with securities, but also risks of suffering losses. It is advisable to first get an overview of the area of securities.Investors can buy the following securities, among others:
- Federal securities
The following applies before buying the securities: In order to understand the financial product or the associated products In order to better assess opportunities and risks, investors should inform themselves in detail about how it works. Differences between the various securities can be seen not only in the return opportunities, but also in the associated risk. In comparison with many other securities, shares and certificates can be assessed as being more risky. A bond is a fixed-income security. There are also different types of bonds. This includes government bonds, corporate bonds, Reverse Convertibles and more.
Investors should also first get an overview of the different types of securities in order to select the right financial product for trading. When choosing a security, personal risk tolerance and the investment objective are also important. How much risk do I want to take? Every investor should answer this question for himself before the trading decision is made.
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What are the trading hours on German stock exchanges?
The opening times of the German stock exchanges are not the same. The Stuttgart Stock Exchange opens at 8:00 a.m. and closes at 10:00 p.m. Whereas the Munich, Berlin, Düsseldorf, Hamburg and Hanover stock exchanges close at 8:00 p.m. Trading can take place every trading day at the listed trading hours. The stock exchange is closed on many public holidays. This also applies to the weekend. The German stock exchange XETRA is an electronic trading system that also has trading hours. These go from Monday to Friday from 9:00 a.m. to 5:30 p.m. The Tradegate stock exchange shows trading times for shares between 8:00 a.m. and 10:00 p.m. Funds and bonds can be traded on Tradegate between 8:00 a.m. and 8:00 p.m.
There are differences not only in the trading hours of the various German stock exchanges. The trading hours for the different types of securities can also vary, which should be taken into account. An overview of the trading hours of international stock exchanges is easier if the trading hours are specified in CET (Central European Time). Otherwise, the time difference would have to be factored in.
The New York Stock Exchange opens at 3:30 p.m. (CET) and closes at 10 p.m. The Nasdaq exchange also has the mentioned trading hours. The trading hours of the Shanghai Stock Exchange are between 2:30 a.m. and 8:00 a.m. (CET).
The trading hours for some securities may vary from the normal trading hours Exchange differ. If you want to buy and sell securities on international stock exchanges, you should make sure that the trading times are in CET when collecting information. The conversion, taking into account the time difference, must otherwise be done yourself.
Which entries are required when buying securities for an order entry?
Who wants to place an order must indicate whether it is a buy or sell order. Not every investor has the security identification number for a share to be bought. Certain securities can be found using the securities search. In the course of order entry, the desired security must of course also be specified. Care should be taken to ensure that the WKN or ISIN is specified exactly. The stock exchange must also be named if the security is tradable on several stock exchanges. Entering the number of pieces is also required. In addition, the period of validity is also of interest.
Placing an order requires little effort. Choosing the right selection of securities is certainly much more difficult. The security identification number (WKN) or the international security identification number (ISIN) can be used to indicate the security to be bought or sold. The securities search presents itself as a useful tool for investors.
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Buy and sell shares - the right timing
Making a trading decision at the right time can decide whether to succeed or not. The right timing is important not only for the purchase of securities, but also for the sale of securities. Emotions can thwart a good time of trading. If you want to make the big money quickly and let yourself be guided by greed, you take an unnecessary risk of getting in at the wrong time. Emotions can also be completely out of place when selling securities. Those who make a hasty sale based on fear and doubt sometimes leave attractive profits behind.
As far as the investment strategy is concerned, it can be seen that some traders prefer short-term trading. Day traders should also be mentioned here. With day trading, a position is opened and closed within a trading day. In order to hit the right time with this investment strategy, the current exchange rate data must be available. This should include courses that are given in real time. Anyone who relies on long-term stock trading should not be so irritated by short-term price fluctuations and sell a share early.
When it can be worth investing, you can also use various analysis tools to assess, The technical chart analysis is a popular tool for many investors. A distinction can be made between line chart, candle stick and bar chart. Chart analysis must be mastered to correctly identify a trend.
Investors should not be led by emotions when trading securities. Technical chart analysis can be used to analyze the price of a share. Real-time prices are an important source of information for short-term investors, so that they do not miss the right timing.
Securities orders - order variants
When placing an order, you can to set a limit. This enables the investor to set the maximum price for the order. A position can be hedged with a limit, which can limit the risk. Beginners should not ignore the various order additions, but should familiarize themselves with the matter. In most cases, issuing, deleting and changing limits is free as long as this is requested online. If you give limits by phone, you often have to pay for them. In addition to the limited order, there is of course also the unlimited order.
The specification of the validity period of an order can also be regarded as an additional order. The order additions "Stop" and "Trailing" represent further options that investors can use. With a stop order, the purchase or sale of securities is carried out precisely when the previously defined stop price is reached. The trailing stop order is a combination of two order supplements. Investors can use this order supplement to hedge profits on a sell order. For the use of this order, the stop price and the following distance must be specified. In addition, there are the following order additions:
- All or nothing
- Fill or kill
- Trailing Stop
- One cancels the other
Even beginners should be aware of the functions of the different order supplements in order to be able to use them specifically for securities trading. With the right use of order additions, investors can reduce risk. In addition, profits can be secured, which shows a further advantage of the additions to the order.
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Useful tools for beginners
Educational offers: Some brokers offer investors an educational offering that includes learning content that can facilitate the entry into securities trading. Webinars and videos give interested investors an insight into everything worth knowing about stock exchange trading. Anyone who trades in securities and commodities without knowing the basics of the stock market is taking an unnecessary risk. Knowledge is also power when trading on the stock exchange. It is therefore imperative that beginners familiarize themselves with the basics before actively tackling trade. The broker’s educational offers also offer opportunities for further training, which benefits advanced investors.
Demo account: Those who have never executed an order do not know what is going on. So that you can use the functions of the trading platform, it can make sense to try them out with a free demo account. There are also demo versions for various trading software, which provide an insight. Positions can be set via a demo account and with virtual amounts. Which means that trading can take place via the demo account without risk. However, whether the demo account has the same functionality as the regular trading platform does not always have to be the case. Registration is required for some demo accounts, but not necessary for others. The useful life can also make a difference in the different demo accounts.
Market overview & news: Beginners should also be aware of the current mood on the market. An overview of the market is therefore advisable. How are the prices developing and what are the latest news? On the basis of up-to-date news on stock corporations, which are represented, for example, by quarterly figures, an estimate of the price development can be made.
Beginners should prepare to trade securities. The broker's educational offers can be used for this. But the use of a demo account can also be helpful. In this way, first steps can be taken without risk and experience gained. The current events on the market should also be considered and included in the investment decision.
Conclusion: Securities are easier to buy today than ever
The entry into trading with securities requires good preparation. Which securities an investor trades in depends not only on the willingness to take risks, but also on the investment objectives. The order additions that are available for securities trading should be understood in their function in order to use them in a targeted manner. An order must be submitted in various ways, but this can be done with little effort. When placing an order, limits can also be set. For many online brokers, a custody account is not associated with fees for custody account maintenance. However, there may be exceptions here. A comparison can be used to obtain detailed information about the brokers' offers.