What I realized when I started trading on the stock exchange

2024 Author: Malcolm Clapton | [email protected]. Last modified: 2023-12-17 03:44

This develops responsibility and emotional stability, teaches us to understand the global economy and finance. And just very exciting.

We all watched films about brokers who earn huge money on stock and currency exchanges, drive cool cars and speak an incomprehensible language. I have always been attracted to this area, but it so happened that I received a technical education and heard about finance, stocks, futures, bonds, fundamental and technical analysis only on TV or in the same movie. Now I work in a large company and have an average salary by Moscow standards, which allows me to save money.

And last year I decided to enter the fabulous world of trading on the stock exchange. I will not describe the whole process, but I will dwell on the main points that I made for myself this year.

1. Technically it is not difficult

Indeed, it is no more difficult than getting a card in a bank. The process is almost identical.

1. Choose a reliable broker. Some banks can also be brokers. You can choose using sites with ratings on the Internet. Some brokers allow you to register an account remotely - through "Gosuslugi".
2. Determine the service tariffs. Usually they are the same for all - this is the percentage of transactions (buy / sell) with financial instruments (stocks, bonds, futures, currencies) on the stock exchange.
3. You make a purchase and sale through a terminal on a computer or in an application on a mobile phone.

The entire history of transactions is stored in the brokerage account database. The difference between the selling and buying prices will be the expected profit, dividends or coupon income can also be added to it, and you also pay a percentage to the broker for the conclusion of the transaction. I will not dwell here in detail, as there are enough nuances. But you should not be afraid of this. Keep in mind the analogy with buying a phone on the Internet: the actual purchase is not a problem, but choosing the perfect device with all the desired characteristics can take a lot of time.

2. Have to learn

As I mentioned above, buying or selling a financial instrument is not labor. But which tool to choose is the main question. And then - when exactly to buy and when to sell. Or keep to earn dividend or coupon income.

We'll have to figure out how the world economy works. Why is everyone talking about the price of oil. Why is gold used as a means of insurance when there is panic on the exchange? How to keep financial records. Which companies support the sectoral economy. How to read a company's financial statements. What are trend patterns and moving averages.

And with deeper immersion, you realize more and more that you do not know anything. Here the Internet, books, articles, videos, recommendations of friends, moms, dads, grandmothers come to the rescue (although the latter will think that, most likely, you have gone crazy and are dealing with some kind of financial pyramid).

3. Emotionally it's hard

If you suddenly decide to buy risky instruments, be prepared that this approach will make you nervous and constantly check whether your chosen stocks have risen or fallen in price. It looks like shopaholics are watching sales and are afraid to miss out on cool discounts.

There will be experiences: “I should have bought earlier”, “I should have sold earlier”, “Maybe sell now”, “What to do ?!”.

To reduce emotional pressure, invest in trading on the exchange the amount of money that you are not afraid to lose. And as your experience grows and the strategy is developed, you can increase the amounts used in transactions.

4. Nobody knows what will happen

No matter what anyone says about the future, in fact, no one knows for sure. Although analysts can make predictions based on their experience, market conditions and political environment, there is only the possibility that the price will change in this way and not otherwise.

It is useful to study such versions as it informs about the mood in the markets and helps to make decisions about buying or selling. But no one ever gives a 100% guarantee.

5. It's fun

Trading on the stock exchange is really addictive. There is an element of excitement in this, and a competitive moment, and the feeling of belonging to something mysterious, about which your friends and acquaintances have heard only on TV.

The main thing here is not to lose your head. Maybe like in a casino, where they can leave you without your pants. Or it can be a means of saving and earning money with a detailed and responsible approach.

6. Responsibility develops

You need money to trade on the stock exchange. Free money so that you are not afraid to lose it and then go hungry. This motivates to reconsider the attitude to finance, to look for ways to increase earnings or reduce costs. Financial literacy and responsibility develops: you will probably think twice before making a spontaneous purchase.

I spoke briefly about the insights I received in the first year of trading on the stock exchange. Since I was choosing rather risky options and gaining more experience, the year ended with a slight minus. However, it will be covered by a tax deduction on the IIS (individual investment account) and in fact I will be in the black. It's better than having this money under my mattress.

The stock exchange turned out to be not such a terrible monster. Yes, you can lose a lot there, but you can also gain a lot. The main thing is to gradually immerse yourself in all the nuances and subtleties, and with a patient approach, responsibility, effort and, perhaps, a bit of luck, you will achieve success. And then, perhaps, the next film with DiCaprio in the title role will be shot about you.:)