One of the most well-known securities is the share. There are also other securities such as funds and bonds that can prove interesting for beginners when trading on the stock exchange. The electronic process for online securities trading simplifies many things. A security is credited to the depot when it is purchased. Nowadays, investors no longer receive a paper in paper form. As for the transaction, the investment amount is debited from the account. So far everything sounds pretty simple. However, the right choice of securities with which a profitable return can be achieved becomes much more difficult. Beginners in particular must first find themselves in stock exchange trading.
Table of contents
- Exchange trading for beginners - open a portfolio and off you go?
- Analyze prices and make trading decisions
- Investment strategy - conservative or opportunity-oriented
- Which securities should be in the custody account?
- Manage the custody account - also possible while on the go using a trading app
- Buying and selling - do not miss the right time
- trading on national and international stock exchanges
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stock exchange trading for beginners - Open a custody account and off you go?
In order to start trading on the stock exchange, investors need a custody account with a custodian bank. The securities are kept in the custody account. If you would like to build your own custody account and do without advice, you can open a custody account with a direct bank or an online broker. The conditions for the deposit can prove to be more favorable with an online broker or a direct bank than with a branch bank. But a comparison can also pay off here. Many online brokers do not charge for custody account maintenance. However, there are exceptions that charge a fee or make the amount dependent on the trading activity of the investor.
It is not only the custody account fees that are important when choosing the right broker. In particular, the costs for trading should be compared. It can also be relevant whether the broker calculates a fixed price per order or a base price plus a percentage fee on the volume. Investors can obtain detailed information about all costs and fees from the list of prices and services. There are often no additional costs for setting, deleting and changing limits if this is implemented online. If the security is submitted by telephone, additional costs may apply. In addition to order fees, exchange fees may also apply.
A broker should present the trading conditions transparently so that investors can obtain comprehensive information. It may also be that the broker specifies a minimum deposit that investors must transfer to the account before trading begins. For small investors, a high minimum deposit can be an entry hurdle.
It should not be a simple matter to open a securities account with the best broker. A broker comparison is a useful tool to compare the trading conditions and services of the different brokers. The individual demands on trading should also be taken into account when choosing a broker.
Analyze prices and make trading decisions
Many investors take the step of trading on the stock exchange not because the events on the stock exchange seem opaque and risky. How does exchange trading work? Anyone who gets to the bottom of this question has already taken the first step towards trading on the stock exchange. A trading decision should have been preceded by detailed information gathering. If you want to buy a share, you should consider the company that issues the share. What are the company's growth opportunities in the future? Especially investors who want to keep shares in the custody account for a long time should consider this aspect. Those who prefer short-term trading, on the other hand, rely on price data that is displayed in real time.
Technical analysis is also a useful tool for beginners. A large number of investors use chart analysis to identify price developments. As for the graphical representation of charts, the line chart shows a comparatively simple form of representation. The course of the course is represented by a line. The structure of a candlestick chart is different. But this instrument can also be used to analyze trends in order to be able to assess whether the trend will continue in the future. The color of the body shows whether a closing price was negative or positive.
Exchange trading for beginners should be preceded by information gathering, which also deals with chart analysis. The technical analysis of a course is certainly not a guarantee of a profit. However, chart analysis offers a way to better assess the price. In order to be able to analyze the data correctly, the chart analysis must be learned.
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Investment strategy - conservative or opportunity-oriented
A very conservative investment strategy can be realized with an investment in overnight money. However, a call money account for savers hardly pays off in the current low interest rate phase. The interest is low, so that the savings can only be used to achieve a low return. One option for savers can also be seen in a ETF savings plan. The risk of an ETF savings plan depends on the ETF that is eligible for the savings plan selected for the savings plan. Those who are not ready to take a high risk should look at financial products that are comparatively less risky.
Among the low-risk investment opportunities are pension funds and fixed-income securities. Whereas stocks and futures are associated with a higher risk. Those who pursue an opportunity-oriented investment strategy can benefit from high returns. However, the risks are correspondingly high instead of having to report a loss. In the worst case, even the total loss can occur. Beginners should be aware of their risk appetite before selecting and buying securities. In the course of this, the capital employed should also be appropriately determined.
The period over which an investment should run is also important for the investment strategy. Those who prefer short-term investments can choose periods up to 6 months. The medium-term investment can last between six months and up to three years. A long-term investment strategy is designed for more than 3 years. Patients who pursue a long-term investment strategy need patience.
How the investment strategy is structured also depends on the personal risk tolerance of the investor. If you trade securities with a higher risk class, you can generate a rich return. However, the risk is also high, so that the investment can also result in a loss or even a total loss. Day traders narrow the time frame for the investment to one trading day. A long-term investment, on the other hand, can run for several years.
Which securities should be deposited?
Those who put together their own securities account can consider using securities select different risk classes. By investing in several securities, the risk can be spread. If you put all of the available money on a single title, you take a higher risk. The profit or loss is therefore dependent on the development of precisely this individual title. When trading on the exchange, it should be noted that not all financial resources are put into trading. If, for example, the car breaks down, there should still be enough reserves for the repair.
The investment can also be made in a securities savings plan. Long-term assets can be built up using a savings plan. The range of security savings plans is large, so that investors can also realize their own claims here. Many securities savings plans can be set up for as little as EUR 50 a month. Which means that the minimum monthly savings rate is € 50. In addition to share and fund savings plans, the offers also include ETF and certificate savings plans. Savings plans usually go hand in hand with flexible features, which show that the savings rate can be adjusted at any time. In addition, it is also possible that the payments can be paused. In this way, a savings plan can be saved depending on the financial situation. An investment in online commodity trading could also be interesting.
How does exchange trading work? This is not the only question to be clarified. The question of the right choice of security is of particular interest. Should funds, certificates, shares or bonds be placed in the custody account? The risk can be reduced accordingly by means of a portfolio that is widely spread. A securities savings plan shows another way to build up assets.
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Manage securities accounts - also possible while on the go using a trading app
The securities can be managed via the custody account. A look at the custody account provides information about how securities are developing. Various brokers offer a trading app that can be used to view the values in the depot even while on the go. This option is particularly advantageous for investors who implement trading at short notice. In addition, the purchase or sale of securities can also be implemented via such an app. Of course, a stable internet connection is required. The trading app is available for mobile devices such as smartphone or tablet.
However, the various trading apps are usually only available for mobile devices with iOS or Android operating system Download ready. The functionality of a trading app often also includes an overview of real-time prices, so that investors can find out about the current prices. This has the advantage that you can react to price fluctuations while on the move.
A trading app is a practical addition to trading from your home PC. The apps do not always have the same range of functions on how the regular trading software. The app can also be used to take a look at the depot while traveling on a train. The app offers useful flexibility for investors. Attractive opportunities can be seized via the app and can no longer be missed.
Buying and selling - don't miss the right time
When trading on the stock exchange for beginners it is certainly also important to know when to buy or sell a security. Anyone who has no experience with stock exchange trading must be aware that emotions should not have any place in stock exchange trading. Beginners should let themselves be tempted and strive for quick money. Highly speculative investments can also result in severe losses. In addition to greed, doubts can also unsettle an investor, so that a security is sold too early, leaving additional profits behind. If you invest in stocks in the long term, you need a certain amount of calm in the event of short-term price fluctuations, in order not to act prematurely and wait.
Bad securities should of course not be kept in the portfolio for too long. What should definitely be avoided is to sell shares early because the financial resources are needed elsewhere. If the price is bad and an investor has to sell because he urgently needs it from the investment, this can result in unnecessary losses. Money that is used for exchange trading should also be dispensable for the investor, sometimes over several years. The relevant investment strategy is important here. Investors should show the willingness to inform themselves about a security.
The right timing is less important for long-term investments in shares than for short-term investments. Patience can also pay off when buying shares. However, it is almost impossible to find the right time to buy or sell a share.
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Trading on national and international stock exchanges
Private investors can implement trading not only on German stock exchanges, but also on international stock exchanges. The trading hours of the German stock exchanges can usually be found out on the broker's website. The trading hours of the most important foreign exchanges can also be listed. If a broker does not provide the trading hours, they can also be quickly checked over the Internet. It is possible for investors to place an order with the broker, even if the respective exchange has closed. However, the order will not be executed until the next trading day.
The most important electronic trading system in Germany is XETRA. Trading hours here are between 9:00 a.m. and 5:30 p.m. The Stuttgart Stock Exchange opens at 8:00 a.m. and closes at 10:00 p.m. Some other stock exchanges such as Hanover, Düsseldorf and Munich open at 8:00 a.m. and close at 8:00 p.m. The time difference makes it possible to trade on various international stock exchanges, even if the German stock exchanges have closed. Anyone who is informed about the trading hours of international stock exchanges should include the time difference if the times are not given in Central European Time.
There are numerous sources of information to find out about the trading hours of national and international stock exchanges. An order can usually be placed through the broker even when the stock exchange is closed. However, the order is not executed until the next trading day.
How does exchange trading work? - If you stick to it and get detailed information, you can also understand stock exchange trading. Anyone entering the exchange trading completely unprepared is taking unnecessary risks. The opportunities and risks of the individual types of securities should be able to be assessed in order to make the appropriate selection of securities. Anyone who is concerned about the investment objective should determine aspects such as investment horizon, risk tolerance and amount. An online broker who shows fair trading conditions and also fits your own requirements must first be found. A broker comparison can prove useful for this. The test winner does not always have to be the right choice.